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IMPROVING READINESS CAPABILITIES
House of Representatives,
Committee on National Security,
Military Readiness Subcommittee,
Washington, DC, March 13, 1998.
The subcommittee met, pursuant to call, at 10 a.m. in room 2212, Rayburn House Office Building, Hon. Herbert Bateman (chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. HERBERT H. BATEMAN, A REPRESENTATIVE FROM VIRGINIA, CHAIRMAN, MILITARY READINESS SUBCOMMITTEE
Mr. BATEMAN. The subcommittee will come to order.
Good morning. Today the Subcommittee on Military Readiness is meeting to obtain a better understanding of Department of Defense programs supporting the infrastructure reductions contained in the fiscal year 1999 budget request that is before the committee. The subcommittee is particularly interested in how the military departments will fund readiness requirements if such initiatives falter in execution.
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The subcommittee recognizes that DOD's excess infrastructure and related management problems did not happen overnight, and they cannot be solved overnight. As a result, the subcommittee has generally supported Defense initiatives aimed at reducing the size of infrastructure costs in order to fund readiness and modernization. In fact, the subcommittee has traditionally urged DOD to support quality of life, readiness, and modernization programs as top priorities.
Despite these efforts, the subcommittee is alarmed the DOD's current reduction initiatives may be based on nothing more than rhetoric, rhetoric that the military departments appear to be hiding behind as the Nation's military tooth is sacrificed to protect the Defense infrastructure tail.
There are several reasons for concern. To begin with, a review of the fiscal year 1999 budget documents we have to date do not make a compelling argument that there are executable programs behind the proposed business efficiency and other infrastructure savings in the budget request. In addition, several of the savings proposals highlighted in the Defense reform initiatives have already fallen behind in execution.
This leads to another concern, echoed in the Quadrennial Defense Review, that one of the primary sources of instability in Defense plans is that a migration of funds occur when the savings planned to accrue from initiatives, like competitive outsourcing or business process reengineering, fail to achieve their expectations. This leaves the subcommittee questioning, ''What will happen if you do not achieve your projected savings?'' In particular, in fiscal year 1999, will the Army be able to support the budget request of 800 tank miles for training if their $450 million in efficiency savings do not appear?
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A further concern is that the Quadrennial Defense Review recommends an additional reduction of 150,000 positions from active, Reserve, and civilian employees, mainly because the initial infrastructure reductions proposed in the QDR did not support readiness and modernization goals. Sixty-six percent of this additional reduction will come from the Active and Reserve Forces.
Although restructuring of the forces will cover some of this reduction, most are assumed to come from new outsourcing initiatives, particularly in the Army and the Air Force. However, if history repeats itself, roughly 50 percent of these new competitions will be won by Federal workers; therefore, the military departments would have to compete 300,000 positions to reach their goals. The subcommittee has not seen evidence to support this option.
Recently we have seen another option to reduce Federal employment levels, which is Federal employees are not allowed to participate in the competitions. The restructuring of the Air Force's 38th Engineering and Installation Wing is a prime example of such a failure to allow real competition. To our knowledge, the Air Force structured this competition based on current personnel costs and did not allow the approximately 1,700 Federal workers to develop a most efficient structure to compete as the A–76 process would require.
Current law and OMB Circular A–76 both provide for fair and open competitions. Leaving the civilian workers out of the competition is contrary to the expressed policy of Congress and in violation of the statutory requirement that Congress be given notice of personnel reductions of more than 20 positions. Regardless of whether such activities are called outsourcing, privatization, divestiture, or restructuring, Title 10 clearly states that Congress must be notified of a decision to study any current Defense activities for possible performance by a private contractor. Just to clarify, this requirement is not limited to studies using A–76 guidance.
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In the end, there must be a level of good faith between Congress and the military services. It is unacceptable for the military services to continue pursuing hollow, unexecutable, readiness-threatening infrastructure reductions. It is even more egregious to expect Congress to support these reductions and the impact they have on national security, not to mention the American communities, workers, and industry.
For our first panel today, we have Mr. David Warren, Director of Defense Management Issues of the General Accounting Office; and Mr. William Tuttle, president of the Logistics Management Institute.
For the second panel, we have Maj. Gen. David Whaley, Assistant Chief of Staff for Installations Management, Department of the Army; Rear Adm. John Scudi, Director of Shore Installation Management, Department of the Navy; Maj. Gen. Joseph Stewart, Deputy Chief of Staff for Installations Management, U.S. Marine Corps; and Brig. Gen. Mary Saunders, Director of Transportation, Department of the Air Force.
Before we get into the hearing, I would like to yield to the Honorable Solomon Ortiz, the ranking Democrat on the Readiness Subcommittee for any opening comments he would like to make.
STATEMENT OF HON. SOLOMON P. ORTIZ, A REPRESENTATIVE FROM TEXAS, RANKING MEMBER MILITARY READINESS SUBCOMMITTEE
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Mr. ORTIZ. Thank you, Mr. Chairman.
I would like to take this time to welcome and add my thanks to our distinguished witnesses for their attendance here today.
In the hearings thus far this session, the National Security Committee and the Readiness Subcommittee have received testimony from the Chairman of the Joint Staff, the Service Chiefs, the Combatant CINC's, and both commanders and senior enlisted personnel in the field on the state of the readiness of the force. I remain comfortable with what appears to be a common assessment that our forces at the tip of the spear are ready. At the same time, there is a lot of uncertainty about how deep that readiness is and how long we can sustain it. Recently, one combatant CINC described it as the shallowness of our readiness.
It is ironic that the topic of today's hearing addresses one of the elements impacting on our ability to improve the depth of our readiness; that is, reforming the way we staff and manage our Defense infrastructure.
First, I want to make sure that my position is clearly understood. I am not against modernizing our Defense infrastructure. I recognize that a lot of the infrastructure we have today began with requirements to support World War II, and it has served us well through the cold war era. Updating our business practices should be done where required. What I am concerned about is how the modernization takes place. How are we going to do it? How is it going to take place?
Over the past few years, I have watched as large numbers of our dedicated civilian employees have been removed from the work force simply to get a mandated personnel ceiling. These reductions were made even while we have no validated process to determine work force requirements and when there was a backlog of work to be done and money was available.
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Now, Mr. Chairman, while I care about those dedicated civilian personnel who were released, I am more troubled about what those reductions have done to our ability to provide that depth to the readiness of our first-to-deploy forces. It does not require a lot of specific knowledge about the installations or the rules governing civilian personnel reductions to recognize the impacts such reductions have made on the work force, and ultimately, on the readiness of the forces.
At our hearing on March 11, I asked a number of questions relating to infrastructure modernization. I wanted to know if we were training and retaining the right people and in the numbers required. I also wanted to know if the infrastructure was right-sized to sustain current maintenance requirements and any future surge needs, and have we eliminated the organizational barriers that inhibit our ability to improve our maintenance productivity. Our witnesses here today should be able to address these concerns.
Another matter of concern to me in this area is the matter of outsourcing and/or privatization. Again, Mr. Chairman, it should be clear that I am not against privatizing when it makes sense. But, to this date, the Department does not have a good track record regarding privatizing. The Department appears to be willing to implement new concepts without fully examining the total impact.
As the Department searches for dollars, I imagine it must be attractive and easy to adopt concepts if they merely offer the potential to save money. While they herald the presence of competition, the savings that are supposed to materialize just have not been there. In other words, we end up with a very high-risk budget when we develop a budget based upon savings that will not likely, like the chairman says, materialize. It troubles me that we are not only jeopardizing today's readiness but also what we will be able to do in the future.
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Mr. Chairman, I hope that when this hearing is over today that we will have a better understanding of the ongoing DOD initiatives to improve readiness capabilities and we here in Congress, what we can do to help. We want to help, but we want to know what we have to do.
Again, I thank you for being with us this morning.
I am ready to listen to the testimony, Mr. Chairman.
Mr. BATEMAN. Thank you, Mr. Ortiz.
Now we will be very pleased to hear from Mr. Warren of the General Accounting Office, and you may proceed as you wish.
STATEMENT OF DAVID R. WARREN, DIRECTOR, DEFENSE MANAGEMENT ISSUES, U.S. GENERAL ACCOUNTING OFFICE
Mr. WARREN. I am accompanied today by Mr. Holman.
Mr. Chairman, Mr. Ortiz, members of the subcommittee, I am pleased to be here today to present our observations on the Defense reform initiatives. GAO strongly supports these initiatives, and we understand that these are very difficult tasks for the Department to do. Nonetheless, they are efforts that obviously need to be undertaken.
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These actions are intended to reduce DOD's business support activities so operation and maintenance funds can be freed up to support weapons systems modernization. Given DOD's difficulties in implementing past reform initiatives, we are, in fact, concerned about whether or not that same pattern will occur in the future.
In that regard, I would just like to make four key points:
First, we think future budgets are being put at risk by reducing budgets based on expected savings. If these savings are not realized, funds will not be available to meet other priorities, such as weapons systems modernization, if that does not occur, or if that does occur, then we may experience readiness shortfalls.
Past reform initiatives such as the Defense Management Review [DMR], initiatives in the early 1990's used the same approach. When those savings did not materialize to the extent expected, planned savings in other parts of the Defense budget were reduced or support functions were underfunded. The same risk exists with the DRI's.
For example, savings of about $6 billion are expected to come from future competitions from the A–76 process. In anticipation of these savings, the Defense budgets have already been reduced in the outyears. However, our past work shows that while A–76 competitions do, in fact, save money, they typically have been less than originally estimated, and they have also taken longer to achieve. So that does create an element of risk in the approach that they are using at this point.
The second point that I would like to make is that significant opportunities do exist for business process reengineering. This is something that the Department sorely needs to do, and we give the Department great credit for recognizing that and moving forward and trying to take these steps.
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In particular, the prime vendor program has been particularly successful in the food, clothing and textile area. The difficulty there is that only represents 3 percent of the items that the Defense Logistics Management Agency manages. The other 97 percent of those items are hardware items.
In order for DOD to achieve its goal of using prime vendors for 40 percent of its items by the year 2000, that means they will have to, in essence, over a 3-year period, cut that 97 percent down to roughly 30-some percent that they are addressing, while, in the last 4 years, they have only been able to implement this process in 3 percent of their items. So I think that illustrates the difficulty that they face.
Again, that is not to say that we don't think that effort is worthwhile. It is very worthwhile. We are concerned about the speed with which it occurs.
Third, we would like to point out that we also agree that there are significant opportunities for consolidation, restructuring and regionalization, all initiatives within the DRI. We think, again, the opportunities are there. However, our work has again shown in the past that these are extremely difficult areas to deal with.
For example, we recently issued a report on the Navy's regionalization process, their attempt to streamline and consolidate its maintenance programs for fleets and ships. However, the level of savings was not achieved and further reductions were made to the budgets in advance of savings.
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In discussing this with commanders in the field, and this was last year when we did this work about this time, they felt that they were able to accommodate those shortfalls at that time, but they were concerned about the future and that that, in fact, may create fleet readiness problems. You may have heard some of that in the hearing in San Diego.
Lastly, we would like to point to some things that we think are necessary for the Department to work on in order to assure that these types of things do not happen. Specifically, it requires that they continue to address a number of systemic problems that traditionally get in the way of changed management. These include cultural resistance to change, the lack of incentives for seeking change and implementing change, and adequate financial and management information, unclear goals, and the lack of clear accountability for who is to accomplish and follow up and monitor those actions.
In that regard, we think it is particularly important that the Department, in addressing these problems, develop detailed implementation plans through all levels of the organization that address those problems and other implementation problems as they occur.
What we have seen in the past with many of the Department's reform initiatives that they had a very good objective at the outset and with real savings opportunities, but where the weaknesses or the difficulties came in was the actual implementation, carrying it down through the entire organization to the base level, if you will, to make sure it happens up and down through the organization.
In closing, let me reiterate GAO's strong support for undertaking these reform initiatives. However, again, implementation needs to be tracked in order to avoid any unintended consequences.
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Thank you, Mr. Chairman. I will be happy to respond to questions.
Mr. BATEMAN. Thank you, Mr. Warren.
[The prepared statement of Mr. Warren can be found in the appendix on page 727.]
Mr. BATEMAN. I suspect it would probably make more sense for us to go ahead and ask whatever questions we have of you before we have the pleasure of hearing from General Tuttle.
The first question I have is that in my opening statement I made reference I think to a $450 million efficiency savings figure for the Department of the Army. Can you quantify what is in the budget submission for the Navy and the Air Force in terms of projected savings that are supposed to help make the budget fall in place?
Mr. WARREN. My understanding of the savings that relate to the Defense reform initiatives—of those savings that have been taken in the Defense reform initiatives that relate to the A–76 process and in talking to the team before the hearing, we have some soft—what I would call soft numbers, and we would be happy to share those with the committee. But we were also cautioned that they are in a state of flux in order to get to that $6 billion. So we do have a breakout of what I would call preliminary information from each of the military services with regard to the A–76 savings.
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[The information referred to can be found in the appendix beginning on page 831.]
With regard to the savings that are mentioned in the BRAC recommendation, and obviously that has to be approved by Congress, those would go beyond the current 5-year defense plan, so, in certain ways, they are not relevant at this point.
With regard to the reengineering savings, as I think you are aware, no specific savings have been identified with those initiatives at this point in time. So we would be happy to provide the information that we have thus far on the A–76 initiatives.
Mr. BATEMAN. That would be useful.
The bottom line of what I hear you saying is that we are structuring this year's budget and the outyear budgets as they are presently conceived of on the assumption of savings or projected savings; and historical experience would indicate that we do that at considerable risk in terms of whether or not the savings will, in fact, occur.
Mr. WARREN. Yes, sir, that is the case. And, again, the Defense Management Review experience is really the best recent example.
I heard Dr. Hamre testify on Wednesday, and they started out at about $71 billion in savings. They did another look and they said, well, maybe it is $62 billion. Then they had the Odean panel come in, and he said, well, maybe it is $51 billion; and, oh, but, by the way, we ought to stop tracking this stuff because we really don't have good data to do it anyway.
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We had done some reports on that at that time, and we were really unable to track in any precise way the level of savings.
Mr. BATEMAN. You have made reference to the prime vendor program as an initiative that should be applauded and should be pursued but had been executed only to the extent of some 3 percent of hardware programs, I think you said. Not arguing with prime vendor and your affirmative comments on it, but is this a program that can be implemented wisely and at the same time protect the interests of the small business community? Can it be implemented in a way that does that?
Mr. WARREN. I think the general answer is yes, but obviously, again, to do that the implementation becomes key. My understanding in the food area and textiles and medical that small business interest concerns have, in fact, been addressed in those contracts that have been let; but that is not to say that there would not be challenges that would have to be faced in the future when you go to a much broader number of items—again, 97 percent of what DRI is managing. But it seems from the experience in the three areas I mentioned that that can be accommodated.
Now, what we have recommended, and the Department has followed this process, we have recommended pilots rather than just going out and doing this in a blanket fashion in order to work through those types of problems. The things that we have encouraged the Department to do is to expand the speed and the scope of those pilots so that we can get to kind of the end-state vision that they have in a quicker fashion. But certainly small business has got to be considered.
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Mr. BATEMAN. Well, is it your sense that the Department then, working through the prime vendor in establishing pilot programs, is doing so with some genuine sensitivity to the small business concern?
Mr. WARREN. I know that is the case as it relates to the medical and food—we have had experience with that, when we were working on those programs in detail a couple of years ago, that was clearly an issue that was being raised and talked about. The Department is fully aware of that, very sensitive to it.
Mr. BATEMAN. Mr. Ortiz.
Mr. ORTIZ. Thank you, Mr. Chairman.
I would like to ask Mr. Warren if he could please comment on GAO's analysis of the Defense Science Board savings and investment estimates and if you are familiar with the Defense Science Board's recently updated logistics strategic plan. And, if so, could you comment whether you believe it lays out in sufficient details a road map of how to reduce the logistics infrastructure? Maybe you can give us a little information on that.
Mr. WARREN. Let me take the logistics plan first. I should say first, we have not reviewed it in detail, but in preparation for the hearing we have looked at that.
I would say that the plan does lay out a number of strategic areas that need to be addressed, and I think the areas that they lay out are areas of importance. Total asset visibility [TAV], for example, is a high priority; implementing focused logistics is a high priority. So I think they have set out a good set of strategic goals that need to be addressed.
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The concerns that we have had with the strategic plans and the logistics plan in the past is that there has not been a good linkage between those plans and then actually the implementors, which are the military components, that will have to then take those plans and turn them into real programs.
The plan now indicates that there should be an identification, for example, of resources, and that should be worked through the planning programming budgeting system [PPBS] process. However, what is lacking is an indication of how much money is going to be applied to these, what level of resources is needed, for example, to achieve—in the case of total asset visibility [TAV], they are estimating now that that will be implemented in the year 2004.
So the question that I have rolling out of that plan, do we have the right resources throughout each of the individual military service components to make sure that that 2004 date will, in fact, be accomplished?
So, overall, I think they have a good strategic set of things they are trying to accomplish. Again, what I worry about is how that is going to be linked to service implementation and then resourced properly to make sure these things that are important to improving the logistics activities, in fact, happen.
I am sorry, the first question related to?
Mr. ORTIZ. The second part of the question was if you are familiar with the updated logistics strategic plan.
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Mr. WARREN. I am sorry, the DSB. We did look at the Defense Science Board estimates; and, in our assessment of those, we felt that they were somewhat overly optimistic.
Our basis for saying that I guess was really twofold. DA&E took a look at those estimates and, in their judgment, they felt only about $2 billion of the $6 billion that were identified in the Defense Science Board estimates were achievable.
In addition, many of the assumptions that were in the Defense Science Board report—and I guess, in fairness, I would say there were an aggressive set of assumptions. They assumed A–76 was going to go away. They assumed 50–50 was going to go away as it relates to the depots. Whether or not those types of things will happen I think is subject to question. So, from that standpoint, we felt the assumptions were overly aggressive.
A third point that we raised in our report was that, also, the savings estimates that were used were based on A–76 studies that had come from commercial-type activities that related to more general activities, say of grass-cutting and garbage collection and typical things that we have done around bases where there is a high competitive base; and you would, in fact, through competition, expect prices to be driven down. As you get into other areas where it is more sophisticated and a smaller base of competitive market out there, then we question whether or not that level of savings may be as great.
So those were the basic issues that we raised with regard to that report.
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Mr. ORTIZ. Let me say what I am concerned. In fact, at yesterday's hearing, one of our members stated that there was the possibility that the Chairman of the Budget Committee was coming out to see if he could offset $1 billion from defense.
And I know that DOD has been very optimistic in assuming that they will have all of these savings, but when we get an additional $1 billion cut that we will have to offset, I mean we are going to be in a very, very bad situation. If we do not go through the savings, if we don't take the savings, on top of that $1 billion, what are we going to do?
Mr. WARREN. Well, as I said, then there will be hard budget choices in the future. Either the money will not be there for modernization as projected, or we are going to have a shortfall in some of our readiness accounts.
I think we would agree that aggressive goals are important in any reengineering process. Of almost every private sector firm that we have talked to, that has been the approach: set aggressive goals, get top-level commitments, set division. But, again, what is missing traditionally in the Department has been driving that all the way down through the organization to make it happen.
So, based on past experience, that is why we are raising a caution flag with regard to expecting those savings too soon.
Mr. ORTIZ. Thank you, Mr. Chairman.
I have more questions, but I will give my colleagues a chance to ask questions as well. Thank you, Mr. Chairman.
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Mr. BATEMAN. Mr. Evans.
Mr. EVANS. Thank you, Mr. Chairman.
Mr. Warren, while the trend in the Department of Defense is to seek outsourcing, there now seems to be a trend in the private sector to bring back work in-house. Mr. Chairman, I would like to enter into the record the following article from Information Magazine entitled ''Reigning It In.''
Mr. BATEMAN. Without objection.
[The information referred to can be found in the appendix beginning on page 823.]
Mr. EVANS. This article goes into great detail about how many companies are finding that their decision to outsource information technology functions did not meet their expectations; specifically, in real life cost savings and the quality and delivery of service. These shortcomings have been compounded by expensive contract renegotiations to obtain the services they wanted in the first place, or the tremendous expense to try and bring back the work in-house.
Mr. Warren, can you comment on this? Do you believe there are lessons to be learned from some of the outsourcing problems faced by corporations, particularly in the field of information technology?
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Mr. WARREN. Yes. I think clearly that is the case. Information technology was one of the very popular areas that outsourcing was used on. The concept, in general, the companies went through and tried to identify what their core business areas were, and many of the companies said—kind of threw up their hands and said, boy, we don't understand this information technology stuff. We know we need it, but we build cars or we build widgets, and let somebody else do that for us. So there was—that was the area where the greatest move had occurred.
Also, there has been a very significant move towards what they call third-party logistics for many companies. In other words, they make particular items, manufacture particular items, but they don't want to particularly be in the business of storing those items and transporting those items. So that was another area, particularly during the early 1990's, that received a lot of attention on outsourcing-type initiatives. We have not done a specific study, but I can give you my general impression from reading that I have done in the area.
What I am seeing now in the literature is really a mixed bag and it relates to just what you are saying. There are still a group of companies that are very aggressively continuing to go out and use outsourcing as a means of improving their business operations. On the other hand, there is a number of articles also appearing about folks who started this early in saying well, you know, we have reconsidered it now and we really think we need to bring it back in. Typically, the reason they are talking about bringing it back in is that they found that they just couldn't get the type of responsiveness that they hoped to in terms of quality of service to their internal customers to get the types of things done through information technology or perhaps logistics support.
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I guess the real answer will lie somewhere in the middle. I think there are going to be some firms where outsourcing is, in fact, going to work very well for them and they will use it on a continuing basis. There are going to be others that are going to find that this just doesn't fit with their business strategy and doesn't allow them to operate in a way that they want.
So I guess what I am trying to say in summary is I don't think it is appropriate to say this is an all or nothing approach. In other words, outsource or nothing. It is something that you need to look at from a business activity-to-business activity standpoint and say, does this make sense for this particular business activity? I think that very much applies to the Department of Defense, because they have a wide spectrum of business activities that they have out there in support of the military forces. So for some it may work exceedingly well; for others we may well find that this is just not a good fit in the same way that the private sector has.
Mr. EVANS. But are we looking at it from that point of view so far? It just seems to me on the committee that outsourcing is the mantra.
Mr. WARREN. Well, I think at this point in time we—the Department is where many of the private sector firms were in the late 1980's and early 1990's where they were saying outsourcing is the way to go, and I think DOD is at that point in terms of their maturity of dealing with this particular issue from a management standpoint. What I would offer is that we would hope that as the Department moves forward with that, that they would develop a more sophisticated management approach to the application of outsourcing and place it in those areas where, in fact, it is a good fit, it is going to be value-added and yield a benefit to the Department.
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Mr. EVANS. All right. Thank you.
Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Mr. Evans.
Mr. Underwood.
Mr. UNDERWOOD. Thank you, Mr. Chairman.
Picking up off of Mr. Evans' question, it seems like in organizational behavior, the pendulum swings from time to time and sometimes there is some lag time in various organizations. So you centralize, you decentralize and then you decentralize too much, so you start centralizing, and it may be that in outsourcing and in-house activities; I would like to follow up a little bit on that and see if you think that maybe the DOD is a little bit in a business time lag on this issue. If, in fact, what Mr. Evans has pointed out is accurate, that there is a general reevaluation of the value of outsourcing, and if that is the case, then many of these plans in anticipated savings are going to have to be redrawn as if DOD is following best business practices and best business practices are constantly being reevaluated, and in fact, there is a trend towards going back in-house.
Mr. WARREN. I don't know if I would say they are in a time lag; I would say they are in a position where they are really working to decide what their best business strategy and approach would be to accomplishing this reengineering. There are many ways that you can do it. You can do it through in-house operations, you can do it through consolidations, you can do it through restructuring, you can do it through outsourcing, and I guess what I am suggesting is I think the Department needs to position itself to have a set of management tools that it can draw and bring into the particular business activities, where appropriate, to add value. Sometimes it will be outsourcing; other times it may be consolidation; other times it may be just simply reengineering those activities that you have.
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So again, I would be arguing for kind of a high-level strategic plan that sets that out in each of your major business areas, and then follows on with implementation plans that either include outsourcing, consolidation, restructuring, whatever the case might be, as opposed to, as you have mentioned, just a blanket approach, in a kind of ''one size fits all'' and this is going to fix everything, whether you are dealing with the Defense Finance and Accounting Service or whether we are dealing with the depots or whether you are dealing with inventory control points or whether you are dealing with the Defense Information Service, or whether you are dealing with the printing service. Each one of those business activities has characteristics that are unique to the operations that they are conducting, and so they need a unique business strategy.
Mr. UNDERWOOD. Well, maybe from your point of view as you examine it in close detail, it looks like a multifaceted strategy, but from this point of view, it looks like the constant attention to outsourcing and getting away from doing work in-house is kind of advertised as the way to resolve resource shortfalls, which I think is, based on what you have said, is clearly not—is optimistic to the extreme.
Mr. WARREN. Yes. Just let me clarify, I am clearly not advocating outsourcing as a single, and I would agree that that is where the Department seems to be right now. What I would be advocating is that they use this toolbox approach.
Mr. UNDERWOOD. OK. In your general characterization of the Department's activities, you have indicated that it has the potential for saving a lot of money and you seem to be of the point of view or the conclusion that the DRI is good—is substantially a good direction to go, but that there are a number of problems in implementation.
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Mr. WARREN. Yes, sir.
Mr. UNDERWOOD. So that we are not dealing here with a poor plan and good implementation, but we are dealing more with perhaps a good plan and poor implementation. Is that a fair characterization?
Mr. WARREN. Well, I would just modify it a little bit. I think we are dealing with a very good vision that you need, desperately need to reform the business activities of the Department, but in order to do that, you need solid planning, strategically, and again at what I would call tactically, as you take those initiatives down through the process.
Mr. UNDERWOOD. At the tactical level you identified a number of problems, including incentives for seeking and implementing change, cultural barriers, parochialism, and others. Maybe the others as well would like to comment on this, but what would you suggest as ways to resolve the issue of incentive? What incentives could be built in?
Mr. WARREN. Well, I think clearly one of the biggest concerns rests with the activities that are affected, are whether or not they are going to be able to keep at least some portion of those savings that they achieve in essence for the pain that they will feel from making themselves more efficient. So I think that is a good strategy. In other words, it is just not kind of a one-way street: I am going to go through the process and the difficulty of perhaps letting employees go, completely reengineering my management team, and for that I will be rewarded by having less resources and unable to do many of the things that I would like to do.
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Mr. UNDERWOOD. Not much of an incentive.
Mr. WARREN. No, not much of an incentive. So I think that is one thing that needs to be considered in terms of the incentive process. Somehow we need other incentives, and I think this committee and others have worked hard on that. There needs to be a transition strategy for those personnel that will be affected by the changes that occur. What we saw during the—principally in the 1980's and early 1990's in business, reengineering did many things and added value, but most of all, in most companies, it did, in fact, reduce employees. So there needs to be a strategy for that transition for those personnel that have worked for the company or for the Department for those, all those many years in order to facilitate the accomplishment of that.
Mr. UNDERWOOD. Well, you know, the CEO's of those companies got huge bonuses to carry those out and they moved around from company to company. So I would assume we don't have those kinds of incentives available to us in this instance.
Mr. WARREN. I wasn't talking about the executives, I mean in terms of like priority placement programs, things of that nature that are already in effect, so that the employees see that there aresome opportunities for them in the future, and they are not going to be just discarded as a result of this process.
One point that I think is important to this business process reengineering, fundamental to what has been done in the private sector is basically two things, and I am most familiar with logistics, but information technology and rapid transportation have been used in essence to replace people and to reduce costs, and those have been the two key enablers that have been used as they have reengineered business processes. So it is almost—invariably there is going to be some impact on personnel as new modern business processes are put into place.
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Mr. UNDERWOOD. If I could, Mr. Chairman, just a more focused question. We talk about using a number of different strategies in different regions or in different areas. Some business practices would obviously make more sense in some areas where there might be a healthy competitive business environment, whereas in other communities where there is no healthy business environment, they might adopt a strategy which might be out of sync with that.
Have you found that to be the case, a kind of disjointed approach inside DOD where they have adopted one strategy for outsourcing or doing work in the private economy where there was no private economy to speak of?
Mr. WARREN. My answer would be, would have to be in general, because we have not looked at it specifically.
Mr. UNDERWOOD. Sure.
Mr. WARREN. But the answer would be yes. I think there has been an approach that says again that this is going to work across the board without consideration for the different types of business activities that you are working in, just as you say, the level of competition that is available, because that is the key. Competition will drive down the cost of doing business, and that is at the heart of it. If that is not there, then I think you need to look for different strategies in order to accomplish your savings.
Mr. UNDERWOOD. Well, I am going to use those comments a lot, Mr. Warren. Thank you.
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Mr. BATEMAN. Thank you, Mr. Underwood. Thank you, Mr. Warren. We may have some written questions that we may submit if you would be kind enough to respond for the record.
[The information referred to can be found in the appendix beginning on page 831.]
Mr. BATEMAN. With that, we thank you and Mr. Holman for being with us and now turn to William Tuttle, who is the president of Logistics Management Institute, something that he is more than capable of doing very preeminently well, following a very distinguished career in the U.S. Army. General Tuttle, it is nice to see you again and we look forward to hearing from you.
STATEMENT OF WILLIAM G.T. TUTTLE, JR., GEN. U.S. ARMY (RET.) PRESIDENT, LOGISTICS MANAGEMENT INSTITUTE
General TUTTLE. Thank you, Mr. Chairman.
Mr. Chairman, members of the committee, I appreciate the opportunity to appear today, and I did provide my written statement for the committee staff, as you instructed.
Mr. BATEMAN. Which will be made a part of the record in both instances.
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General TUTTLE. That statement highlights the studies and analysis work we at Logistics Management Institute have recently done for and have been doing in support of the Department of Defense to improve readiness capabilities.
LMI has specialized in providing DOD with advice and assistance on a broad range of logistics and acquisition management-related issues for more than 35 years. Today, we continue to conduct a broad-based research program in support of our primary DOD sponsor, the Under Secretary of Defense for Acquisition and Technology, and other DOD organizations, including the military services, defense agencies and the joint community.
Now, our broad portfolio of work in support of our sponsors covers the gamut of support operations from exploiting the innovative commercial business practices to reducing support costs, to developing new concepts to support our military forces on the more lethal battlefields of the next century. Moreover, we also have evaluated multinational logistics support operations in Bosnia-Herzegovina and Croatia and conducted seminars on future challenges and directions in defense logistics.
With that broad overview as a backdrop, I will now briefly single out 5 specific examples of work that directly relate to the overall theme and purpose of today's hearing: how to maintain and enhance the readiness capabilities of our military forces in a fiscally constrained environment.
As you might imagine, a substantial part of our resource program is devoted to improving methodologies that are used to develop support requirements and program funding. Our continuing program for the Air Force, for example, is involved in the development of several aircraft spares requirements models that enable the Air Force to develop least-cost aggregations of spares to support specific force readiness requirements in operational tempo's.
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Our aircraft availability model, as it is called, provides the core of the computation that the Air Force uses to determine its peacetime operating stocks while our aircraft sustainability model plays the same role for calculating Air Force's requirements for wartime contingency and mobility spares. The model sizes the spares inventory based on desired weapons readiness levels, such as aircraft availability, a fairly critical issue for CINC's, the percentage of fleet available to fly in an individual mission, rather than looking at traditional fly-oriented measures such as stock on the shelf or percentage of demands filled. This model can correctly relate resource input to readiness levels to aircraft and is particularly effective for that reason.
As you know, many of the weapons systems that the Department will have to support in the next century are already in today's forces, and some are quite expensive to operate. These costs will rise considerably as systems reach the end of their service lives and extensive repair or modifications are required to extend their operational capability. We found, however, that DOD could achieve substantial reductions in operating and support costs of tomorrow's aging weapons systems by inserting contemporary technologies to improve their reliability and maintainability and sustainability. Our analysis and recommendations resulted in DOD requesting funds for applying reliability, maintainability and sustainability modifications to aging systems. There is lots going on in the services as well.
DOD is also trying to reduce inventories to make resources available for readiness and recapitalization. In keeping with our experience, LMI has played an important continuing role in shaping and defining DOD's post-cold war inventory reduction strategy and implementation plan. DOD's efforts have reduced secondary item inventories; that is, spare parts and consumable supplies, from $107 billion in 1989 to 63 billion in fiscal year 1997 constant dollars. Our inventory projection model is used to set future inventory reduction goals.
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In view of the emphasis on reducing inventory levels, the Air Force asked us to assess its inventory retention and disposal procedures. This task involved identifying obsolete and slow-moving items that may be safely disposed of with little danger of having to reprocure them in the near future. Thus far we have identified several billion dollars worth of potential disposal actions.
LMI has also been instrumental in helping DOD make substantial progress toward creating a paperless business environment. For example, we are continuing to assist the Defense Finance and Accounting Service to automate its processes to obtain freight invoices and the U.S. Transportation Command to replace transportation paperwork throughout DOD.
We are also helping the military traffic management command implement electronic data interchange in its port and traffic management operations. Now, efforts in electronic data interchange and electronic commerce may not attract much attention, but they are the types of patient effort required to make significant change in very large organizations.
Finally, I would like to note that we at LMI are quite involved in supporting DOD's efforts to reduce infrastructure costs in other areas, such as personnel management and training. One important example is the assistance we provided DOD in reengineering the area of civilian personnel management. This effort has led to the creation of new consolidated, regional personnel centers and the reengineering of traditional staffing, training, and other business processes associated with civilian personnel management. We currently are supporting the Department's efforts to regionalize infrastructure-supported operations as well.
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Mr. Chairman, this has been a quick snapshot of our research program in support of DOD. In closing, though, I would like to leave you with two broad impressions of this whole process.
First, I believe it is important to note that the military readiness of our forces in the post-cold-war era has been maintained at high levels in spite of crises, force structure reductions and a broad agenda of initiatives to improve the efficiency and effectiveness of DOD's logistic systems and support establishment. Now, I attribute that high level of readiness to the tenacity and determination of our leaders in both the operational and business management communities. They have overcome significant cultural and institutional resistance to change as they fought to bring the defense support establishment into the information age and meet the challenges of the cold war era. That process, which strikes with what Mr. Warren said, I think is the heart of the issue of implementation. It is very difficult. In our research we found only one group of people that liked change: Wet babies.
Second, although much has been done, the DOD still has a long way to go in modernizing its business practices, and support establishment and achieving the objectives set forth in the defense reform initiative report. I don't underestimate those challenges. Those objectives focus on improving efficiency and effectiveness of support operations and making additional resources available for readiness in the challenges of the 21st century within this fixed top line of a defense budget, I have to assert.
e at LMI will continue to support the Department's implementation of the sweeping agenda of change called for in this far-reaching deploy.
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Mr. Chairman, I thank you and the members of the committee for inviting me to appear today, and I am ready to answer any questions you might have.
[The prepared statement of General Tuttle can be found in the appendix on page 767.]
Mr. BATEMAN. Thank you very much, General Tuttle.
In recent hearings, most especially in San Diego last Friday, the committee was advised by numerous witnesses of an extensive degree of cannibalization of aircraft in order to keep the absolutely required number of planes available for immediate deployment.
My question to you, General Tuttle, is to the extent that you have any insights on this from your research, how much of this absence of spare parts is a supply problem of they are there, but they aren't in the right place at the right time, as opposed to how much of it is we don't have the parts?
General TUTTLE. Mr. Chairman, that is a hard question to answer. The more technologically complex our systems have gotten over the last 10 or 15 years, the more difficult it is to forecast what is going to fail, and therefore, the problem for inventory managers is deciding what to buy. If you look at what was forecast years ago and you buy because you are talking about a year to 2 years lead time between deciding at the wholesale level to buy, and that part being delivered, lots of things have changed in that time. You know, force structures are down, aging is up, inventory management requirements change, so it is a terribly difficult problem of predicting, you know, in again a fiscally constrained environment. So it is inevitable that we are going to experience some of these problems. If we bought everything, obviously we can't afford that, so the question is deciding. The forecasting of demands or failure of modes is not—there is not a scientific process. Engineering forecasts for new systems that led to huge provisioning has built up the excess inventory that we have today. As you know, about $14 billion of the defense inventory is inactive. It is a result again of the force structure drawdowns and predictions that were based on best estimates at the time, but didn't come true, things we thought would fail did not, things that people thought would not fail at the time did because of the unanticipated change in the operational tempo or mode of the pilots or others operating the equipment caused failures to occur before they were thought to by the engineers.
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So all of that leads into the difficulties, something that you have to manage day-to-day, and it is terribly difficult for the Department, with these long lead times, multilayered defense inventory systems and retail levels and then wholesale levels. So it is something they have to work through and get closer to the customer. The commercial industry doesn't do it that way. They have much shorter cycle times, 50, 60 days; they have continuing orders. The Department is moving in that direction, longer term contracts with the ability to adjust the orders to try to adapt to the commercial means, but it is a difficult process.
Mr. BATEMAN. I would be interested in whether or not you have done any studies or evaluations of the effectiveness, the efficiency and cost effectiveness of our disposal of surplus property or equipment?
General TUTTLE. I am trying to think. What we have been looking at is retention issues, what should be retained; but the defense reutilization and marketing service processes, as an institute we haven't looked at directly, no.
Mr. BATEMAN. Mr. Ortiz.
Mr. ORTIZ. Thank you, Mr. Chairman.
Good to see you again, General.
You know, I was just wondering if you have seen any studies, whether your institute or studies by DOD, that can prove that contractors are cheaper, faster, better, and what happens to the government's force skill base if contractors are utilized? Maybe you have done some studies that we are not aware of. Maybe you can touch on that.
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General TUTTLE. Well, the Department—we have some work done on that on aircraft maintenance, and it is, as Mr. Warren said, it is a mixed, it is a mixed bag. It depends on how skillful you are at deciding what really is your core business, what you really need to do that no one else can really do for you and still—that you have to do in order to accomplish a mission. But we also have experience. The Army bought the mobile subscriber equipment, 4.5 billion dollars' worth of battlefield digital communication system back in the mid-1980's. I was involved in that from an operational testing point of view all the way to supporting the Army Materiel Command. That is a contractor-supported system that deployed to the desert. My time at AMC, while we were watching the buildup, and obviously trying to manage it, because we were heavily involved in making sure that General Schwarzkopf and all of his folks had plenty of support there, we worried about would that be supported. Every time I asked, what is the operational readiness of the mobile subscriber equipment, these were the communications systems that went out with the divisions and the corps, and it was always 97, 98 percent.
I talked to recently the single brigadier commander from the 18th Corps at that time who is now a brigadier general; and I asked him, and he said you know, without the contractor support, GTE was the contractor that had been deployed to Saudi Arabia very early, we couldn't have made it, because we could not have just relied on our own people and made it. So that system stayed up, it stayed operating and over time the operating support costs of that system have continued to decline. So our experience in that one case, it is not bad. I mean it works pretty good, and in every case—but see, it is done on a system basis. It is not done on outsourcing a depot or an arsenal or a shipyard, it is done on a system basis, and we think there is a lot—there is a lesson learned there. KC–10, the Air Force and other systems are supported the same way. We have to look at what works and maybe what does not work.
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Mr. ORTIZ. The reason I asked this question is because we have had some experiences where the contract has gone out to bases in Virginia, in Ohio, and other bases, and do you know that when they contracted this out, the cost doubled?
Mr. TUTTLE. Yes. If you do it badly, if the formation of your contract is not well done, you don't have good metrics to measure the contract. This is private industry's experience.
Mr. ORTIZ. This is why I am trying to find something that has been good.
Mr. TUTTLE. Mobile subscriber equipment I think has been done good.
Mr. ORTIZ. When we look at Desert Storm, by the experience I had, those that deployed civilian workers, when you compare those with contractors, those contractors' pay and expenses were three times greater than the civil servant.
Mr. TUTTLE. The cost per individual is three times greater, absolutely. The question is, on a task basis. It is sort of like LMI; we have a middle level work force, a lot of retired folks in there. We encounter sticker shock sometimes with our sponsors. They look at the rate.
But it is a question of how much does the task cost to get done, not the individual rate. So in that sense, you have to look at a broader view of the whole process, rather than what you would pay an individual person. McKinzie raises, I am sure, sticker cost with companies, but they keep coming back to McKinzie, because they obviously are happy with the results.
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Mr. ORTIZ. See, in the beginning—and excuse my voice; I had surgery, and it is hard for me to speak—but, you know, I am not against privatizing, again, General, when it makes sense. But as a member of this committee, I have been trying to find contracts that provide savings.
Mr. Warren, maybe in your work that you do, maybe you can tell me if contractors are cheaper and faster and better, because I haven't been able to find that. All I know is that I believe in trying to modernize our equipment; but if we continue—and this is the contract that I have seen—to contract out, we will not have any money to modernize.
Mr. Warren, maybe you can touch on the same question I asked General Tuttle. I am talking about savings.
Mr. WARREN. Right. I guess in the general sense, and I will speak to the A–76 experience; what that has shown is that in about 50 percent of the cases, the competitions are won by the private sector, and in those cases, the savings are upwards to 30 percent. So that would be an indication that, yes, the private sector can, in fact, for certain activities yield savings for some of the particular activities that need to be performed within the Department of Defense.
But, again, I think it is this commodity-by-commodity issue that you really get into.
Mr. ORTIZ. But only for some. Not for all.
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Mr. WARREN. Not for all, yes, sir. I think—the Department, I think, is fairly consistent. Their anticipation, at least as I understand it, is they expect, and now I think they are up to about 220,000 jobs they are talking about subjecting to A–76, that they expect about 50–50 ratio to continue as it has in the past.
Mr. ORTIZ. Another question for the general. You know, we have known each other for a long time, when I first came into the Congress. But did you propose concepts such as this within the Army while you were commander at the Army Materiel Command? Some of these concepts that DOD now has, did you propose some of these concepts?
Mr. TUTTLE. We did; working, for example, on the longer term contracts for parts that I used as an example in answering the chairman's question. We began some of that, rather than buy each year, looking at 5-year contracts and updating and using what we called a task order contract, so you change your orders over time.
Some of that began. We began with the acquisition reforms, with the best value contracting, some of those things that you all in the Congress legitimized, I will say, later in the Acquisition Streamlining Act. So some of those were done there.
Of course, we had the first major BRAC during the time I was in command, and we began to look at major processes and looking at consolidations that we thought were useful, given the fact that the defense budget was going down.
Mr. ORTIZ. Again, the reason I ask, at the hearing we had in San Diego, all the services, the most serious problems, parts. You can't get them.
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Mr. TUTTLE. Yes.
Mr. ORTIZ. If we are going to reduce the inventory on parts, what are we going to reduce if they don't have them to begin with?
Mr. TUTTLE. It is a problem of buying the right parts. Out of millions of items that you have, you can't afford to buy everything, and the problem of selecting the right ones to buy is just a very difficult one in a multilayered inventory process.
One of our producers, a truck manufacturer, told me—last year we were talking about this; he said, you know, I don't see the direct usage of parts for my truck, what is breaking. With our commercial customers, I have a good picture. They beat me up. But I don't see that from the Army or the Air Force or the Navy, and he has systems in all three services, because there is a layer between him.
It is when the inventory manager hits his economic order quantity point, his reorder point, then he blasts out an order that may be a year's or two years' worth of production. Of course, he wants it tomorrow, because maybe the rate of consumption has accelerated. So he doesn't see that.
So there is a disconnect in our present system between what the producer of these things, these systems, is seeing or is not seeing and what the field is experiencing. That is a problem that I think—somehow the Department has to get that together, has to make it closer, so people can analyze.
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I know when I was in AMC, we tried to do a better job of that. We got this huge amount of maintenance data that came back from the field, what is breaking. We had all the demand days. We knew what was breaking. The problem was, we were cutting people and there was nobody to analyze the data. So it is just one of the consequences of the way that the Department has to manage its business.
Mr. ORTIZ. See, Mr. Warren just testified today that the Defense Review Board outsourcing savings of $30 billion by the year 2002 at a cost of $6 billion in investments are overly optimistic.
What are the $6 billion in investments needed? Maybe you can enlighten us on how these savings projections are determined.
Mr. TUTTLE. The DRI projections of $6 billion in savings, we weren't involved in the DRI. We were involved in the Quadrennial Defense Review, some of the analyses leading up to what that is.
It is a combination, I think, of looking at the personnel savings, assuming that you get, as Mr. Warren said, about 50 percent of the A–76 kinds of savings, which is basically, the base operations kinds of activities that are subjected to A–76 will result in industry winning a 30- to 40-percent increase in costs, and the others are won in-house.
Even those won in-house are 25 percent savings, and I think the experience in our studies has confirmed that data. So I believe they built that on that purpose.
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Plus, you know, inventory management savings, by doing a better job of reducing the procurement lead times and those kinds of activities, a better job of ordering the right parts, there are a whole series of savings that the Department anticipates in there.
But I haven't looked at the whole stack of things. I haven't seen the data, and I don't think we have analyzed it. But it seems not unreasonable.
There is a lot of money spent in this system, and $6 billion is a fairly small percentage of the money the Department spends every year in this area.
Mr. ORTIZ. Thank you.
Thank you, Mr. Chairman.
Mr. BATEMAN. Mr. Underwood?
Mr. UNDERWOOD. Thank you, Mr. Chairman.
In many briefings, we hear the phrase ''just in time logistics,'' and sometimes the hearings that we have had have made kind of a mockery of the phrase. So now when I hear the phrase ''just in time logistics,'' I can't help but smile after going through many of these hearings and every time now someone is going to tell me about ''just in time logistics,'' just in time for what, I am not sure.
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But you indicated that perhaps many of these problems are associated with the downsizing and not having the personnel to analyze this and to deal with the inventory problems and dealing with logistical shortfalls.
So the question I am asking you is, is your impression that many of these problems are resource driven? Obviously they are resource-driven, but where would your analysis fall on?
How would you compare maybe the fact that we are just going through a period of downsizing and this is kind of a natural adjustment difficulty, or is it really resource driven?
Mr. TUTTLE. In my view, of course, obviously as you say it is resource driven. We had a lot of resources in the 1980s. We bought a lot of stuff. We had huge inventories. We started—$100 billion in today's dollars when we started the drawdown in 1989.
But I think the problem is more systemic. It is the way we do our business. By way of comparison—and I agree, just in time is not appropriate for the Department; it is a warfighting organization. You cannot afford when you are deployed in Saudi Arabia to not have parts to fix airplanes and tanks and ships. You have got to have them; you have to have enough there.
It is not like Toyota, who can, because of the regular, scheduled, automatic approach they use to their suppliers coming in that door, and make sure they do it on time. That is too much for the Department.
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We need what we call ''time-definite delivery.'' Also you don't need to carry a lot of inventory in Saudi Arabia, to carry for it. We don't need to carry the acres of inventory that we had there either, so there is obviously a middle ground.
I think the process is systemic because of the multilayered process. The fact that we don't manage systems, the Department's and services' logistics activities are organized by function. There are supply folks that run inventory management centers, there are distribution depots both in the services and in the Defense Logistics Agency. There are people that run maintenance depots that are concerned with maintenance. There are people concerned with transportation.
Like any human organization where you have got what we call stovepipes, you have a problem with integration. The great integrating mechanism for the Department is the weapons system. That is the product. That is what our warfighters shoot with and fly with and sail.
So that goes to the analogy with industry; my good friend, the trucking producer, saying, I get the feedback from the truck operators who are out there trying to make a buck. They are trying to schedule their trucks over the Rocky Mountains, and when engines burn out or something burns out, they get a little unhappy.
Well, our squadrons and our ships get unhappy when their parts fail, but who do they talk to? They can't go back to the manufacturer directly. They are insulated in many ways from that.
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So I think we have to start looking at our system in the Department and trying to see if there is a way to get that connection.
Mr. UNDERWOOD. Wasn't all this information technology supposed to resolve all of that, some of these stovepipe problems?
Mr. TUTTLE. But it is not a panacea. We are operating inventory management systems and depot maintenance systems that are 1960's technology. It is tremendously difficult and expensive to try to change that. The Department tried in the early 1990's; and I was partly, you know, to blame, I guess for what, to change the depot maintenance information system.
The Air Force had what they thought was a very good model for doing it. But it is a complex issue, and after spending lots of money, ultimately it was killed. It just wouldn't work. So now we are out there trying to do better, using a commercial product and having some success with the manufacturing resource planning system that industry uses. It is going into Cherry Point and Norfolk Naval Shipyard and a few other places, and that is having some initial success.
But it is just a huge problem. The inventory management of the kind we do, where you have to change stock numbers, you have a big cataloguing operation, to transfer what industry has already done to something that is unique to the Department. It is the classic middle plan role. What industry has done in cutting their logistics costs as a percent of sales since the early 1990's by 40 percent in order to survive, as you well know, is going to take a lot of that middle out of the process and get things to go more direct.
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Mr. UNDERWOOD. I saw in your testimony you talked about BRAC, in your written testimony, you discuss BRAC, and you mention that the Institute did some cross-service analysis of some of the BRAC procedures. Would you like to offer some commentary as to which of the three services was particularly effective or more efficient?
Mr. TUTTLE. I really couldn't generalize on that, because depending on what BRAC you look at and what the institutional pressures were on the service at that time, there were changed behaviors; from the 1988 to the 1991 to the 1993 and 1995 BRAC, there were changes. Navy was reluctant to start. When they did get started, they changed a lot.
Army, I was guilty, if you will, of putting one of our depots on the block in the 91 BRAC. We didn't need two communication electronic depots with the budget headed south, so we tried to jump on it. In fact, we were more aggressive in going after things, we in AMC were, than the Department was willing to live with—certainly than the Commission was willing to live with.
So it really delivered, I think, over time as to which one went after it with greater or lesser aggressiveness and thought. I think everyone is convinced now, as the Secretary said, we have excess facilities, there is no question about it. We need to go after that again. As painful as it is and as bad as the past experience was with this current BRAC, the Congress and the Department really need to get together and find a way to get rid of this excess. It is just costing money and it detracts from readiness.
Mr. UNDERWOOD. Thank you.
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Mr. BATEMAN. Thank you, Mr. Underwood.
Thank you, General Tuttle. We appreciate your being here with us, as well as Mr. Warren and Mr. Holman. We may have some written questions that we will submit for the record, if you would be so kind.
With that, we will present our second panel, which consists of Maj. Gen. David J. Whaley, Assistant Chief of Staff, Installations Management, Department of the Army; Rear Adm. John T. Scudi, Director of Shore Installation Management, Department of the Navy; Brig. Gen. Mary Saunders, Director of Transportation, Department of the Air Force; and Maj. Gen. Joseph D. Stewart, Deputy Chief of Staff for Installations and Logistics, U.S. Marine Corps.
We are pleased to have this panel and look forward to your presentation.
Mr. BATEMAN. General Whaley, we look forward to hearing from you. You may proceed.
STATEMENT OF MAJ. GEN. DAVID A. WHALEY, ASSISTANT CHIEF, OF STAFF FOR INSTALLATIONS MANAGEMENT, DEPARTMENT OF THE ARMY
General WHALEY. Mr. Chairman, Members, it is an honor to be here today and talk to you about the Army's approach to streamlining installation operations, and how we are changing installations to be compatible with Joint and Army Vision 2010, Army XXI, and Army After Next, and most importantly, to improve the Army's readiness capabilities.
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Sir, I am glad to see all of you again. I am glad to meet you, sir. But I will provide a short verbal presentation, and with your permission, submit a written statement for the record.
Mr. BATEMAN. Yes, your written statement will be made a part of the record without objection. That would be the case with all of our witnesses on this panel.
General WHALEY. Sir, the Army is an essential contributor to our national strategic defense strategy. It plays a unique and key role in defending the Nation and promoting peace and stability by shaping the international security environment, responding to a full range of crises when called, and preparing now to meet the challenges of an uncertain future.
In preparing now for an uncertain future, your Army is building upon the operational concepts identified in Joint Vision 2010 to obtain full spectrum dominance, which is the ability to conduct dominant operations across the full range of possible missions. Army Vision 2010 is the Army's blueprint to change and to provide essential land power capabilities for future joint operations.
One of the greatest challenges in achieving Army Vision 2010 is balancing today's readiness and tomorrow's modernization requirements within available resources while maintaining a reasonable quality of life for your service members, civilians and their families.
Our Installation Vision 2010 is the plan for changing Army installations to accomplish this mission. We must critically analyze the services we will continue to provide, the ones we should divest, and those that should be competitively contracted or consolidated. We must also review how to fund and support these services that we retain.
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Tomorrow's installations will support the warfighter, focus on Army core competencies, implement best business practices, maximize use of facilities and eliminate excess, provide quality living and working conditions, maintain stewardship of assets, and be productive in support of members of our community.
Today, I would like to discuss four of these strategies that I believe are central to our efforts to become more efficient and more effective. They are competition, utilities privatization, infrastructure reduction and energy conservation.
Competition through the commercial activities program enables us to obtain quality services and become more effective in two ways. First, it provides a mechanism for in-house activity to streamline their activities and operations, to become more competitive with the private sector, and to become more effective and efficient.
Second, it allows the private commercial sector suppliers to provide and compete our needed goods and services as economically as possible. It is this competition, and not simply pro forma contracting out the service or activity, that will lead to improved efficiencies in our operations.
Since fiscal year 1979, the Army has completed 468 cost competition studies, and the savings from those cost competitions have averaged 28 percent. We currently plan to study approximately 48,000 civilian spaces and 8,000 military spaces for potential competitive sourcing; the steady-state savings once this analysis and reengineering is done should be in the vicinity of about $400 million per year.
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Another initiative is the privatizing of utility systems which involves transferring ownership and maintenance responsibility from existing Army-owned systems to local or commercial utility enterprises. The Army will then simply purchase the utility service.
In addition to reduction of operation and maintenance costs, we gain improved reliability of utility service and we will leverage commercial capital to upgrade and recapitalize these and recapitalize utilities. The Army's goal is to privatize all utility systems where economically and operationally feasible by the year 2000.
We have 265 utility systems across our installations. Some 21 have already been privatized, 16 are in the final stages of privatization, and we have completed 56 more studies. The remaining systems are being examined, and the decision to transfer will be dependent upon the results of those studies. This is an aggressive program, and we are fully engaged, and progress is being made.
In the infrastructure arena, we are also aggressively attacking the problem of unneeded facilities. For the last 6 years, with our facilities reduction program, we have disposed of 47 million square feet of unneeded and old facilities. With the Congress' continued support, we anticipate disposing of an additional 53 million square feet over the next 6 years. This will make our facilities utilization about as efficient as it can be without another BRAC round.
Additionally, where it makes good economic sense and still supports mission requirements, moving an activity out of leased space into unused space on military installations saves lease costs and makes better use of Army-owned space. By doing this, we estimate that steady-state savings of about $70 million can be achieved by the year 2000.
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Energy conservation efforts have been very successful for the Army. We are right on target to achieve our 30 percent energy reduction goal by the year 2005. We are at about 21 percent. We continue to invest in energy conservation projects such as lighting retrofits and energy efficient motors. These projects have an average payback of about 4 years.
We are now exercising energy savings performance contracts, along with the other services, under which the contractor provides energy savings measures in exchange for sharing in the savings. The Army gets new energy efficient equipment and energy cost savings without the upfront capital investment. We have awarded 10 such contracts and are monitoring the real savings that will accrue.
We are also looking at ways to consolidate some of our installation operations with the other services. This is occurring in Hawaii, Colorado, and in Europe. With the establishment of the Defense Engineering Support Center, we hope to achieve further savings through our joint efforts. Additionally, many support functions have already been regionalized across the continental United States.
appreciate the opportunity to outline these key strategies the Army is following to streamline our installations and improve our readiness capacities. We truly appreciate the support that you have provided to us, and we need your continued support to keep today's Army ready, provide an adequate quality of life for our soldiers and their families, and prepare the Army for the 21st century.
Sir, this concludes my comments. I will be followed by Rear Adm. John Scudi.
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Mr. BATEMAN. Thank you, General Whaley.
[The prepared statement of General Whaley can be found in the appendix on page 778.]
Mr. BATEMAN. Admiral Scudi, we will be pleased to hear from you.
STATEMENT OF REAR ADM. JOHN T. SCUDI, DIRECTOR OF SHORE INSTALLATION MANAGEMENT, DEPARTMENT OF THE NAVY
Admiral SCUDI. Good morning, sir. Thank you very much for the opportunity to meet with you today.
Clearly the decade of major weapons systems acquisition is behind us. We are in the decade of life extensions and overhauls and upgrades, as you well know. Our goal is clear for the infrastructure, and our goal is simply this: it is the appropriate infrastructure to support the forces forward deployed and the families left behind.
As you well know, 52 percent of the Navy is underway today; 32 percent are forward deployed. That is about 60,000 sailors out there. So our mission forward deploy is clearly where our focus is.
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We are embarked on two major strategies for reengineering, and they in fact are similar to the ''tool box'' you heard about from GAO. Improved business practices were caused to be looked at because, as you well know, we are coming from a industrial age, not only block obsolescence on piers and runways, but also in our practices.
We do lots of piece parts. We do lots of transaction-based systems. So in our reengineering of our business practices and what we are starting to call a revolution in business affairs, we will be looking at information systems—and I would like to get back to those—and we are in fact using open competition.
Clearly ''outsourcing'' is out of our vocabulary. We have been meeting with yourselves, our employers and labor unions, and clearly that is the wrong term. We believe our savings come from competition.
In the improved business practices area, you are familiar with the regionalization of base operations in our primary fleet concentration areas, certainly in Norfolk, San Diego, Puget, Pearl, Jacksonville; and you are aware that we are creating a forcing function by reducing the number of activities who own the real estate, the type 1, type 2 process.
That is really a forcing function to do two things, to cause activities to focus on their mission—space and warfare can look at space and warfare—and also to streamline that command structure, because we are sensitive to the GAO comment about accountability and detailed plans. We believe not only is all politics local, but also all our home bases and a lot of our initials are local. So we are in fact asking and empowering those regional commanders to make those kinds of decisions.
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It is appropriate every 100 years to look at your facilities. That forcing function causes us, a building at a time and a region at a time, to see that our work force is in the best physical plant we have. It then allows us to incrementally reduce physical plant on our installations that we think are just about right.
In the logistics system and Smart Base technology, in the written testimony we talk about our key enabler, and it is information technology. As General Tuttle said, clearly we are not there yet, but we are working on situation awareness, not only through total asset visibility and sensitive shooter for the warfare, but also for our business practices and processes.
The Smart Base initiative is to get commercial off-the-shelf software. It is difficult, because we are inserting technology not invented here in an organization that Lykes invented here and MILSPEC it, but a lot of those business practices, in fact that will cause us to restructure.
We are using terms like metric-centric warfare. My colleagues in the war business tour will talk to you about the information technology XXI and all. We are absolutely seamless with that. We are in fact the other side of that. So, suffice it to say, open competition, which are in fact partnerships with regional dialogs of industry, small businesses and large—a balance between large businesses and the support they get, often local smaller businesses.
We have the same kind of situation that our major equipment manufacturers do. We want to be sure there are niche markets for small companies to be supported in a general contracting kind of restructuring.
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We also are working with our colleagues in other agencies. An example might be in the security business. A very fine print this time talked about homeland defense. We think homeland defense belongs to the FBI, and we are going to sit right next to and somewhat to the left and behind the FBI. So as we work with colleagues in other agencies, you will get a better Federal response in a region.
The competitive sourcing that seemed to be the sense this morning is part of the strategy. We are looking at that in places like Guam, but we are sensitive to being the good stewards of the public trust to not causing us to do something that would be dysfunctional to the readiness, to ensure that the dollars we get out of this infrastructure go back to the reinvestment accounts as are deemed appropriate in the outyears.
Thank you very much for the opportunity to meet with you this morning, and I will pass it to my colleague and lifelong friend, General Stewart.
Mr. BATEMAN. Thank you, Admiral Scudi.
[The prepared statement of Admiral Scudi can be found in the appendix on page 785.]
Mr. BATEMAN. General Stewart, we are happy to hear from you.
STATEMENT OF MAJ. GEN. JOSEPH D. STEWART, DEPUTY CHIEF OF STAFF FOR INSTALLATIONS AND LOGISTICS, U.S. MARINE CORPS
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General STEWART. Thank you, Mr. Chairman, members of the committee. I am honored to appear before you today. I thank you for your support in the past. It has meant a lot to the Marine Corps. I would tell you that the readiness challenges that we are facing today would be one heck of a lot greater if it were not for the generous assistance, particularly of this committee.
Readiness continues to be our number one priority in the Marine Corps. The O&M dollars that we use to sustain it, we consider those to be really the lifeblood of the corps.
I have prepared in my written statement several initiatives that we have under way, which we are using, that we have implemented to try to stretch those dollars. But what I really wanted to do today was just kind of give you a snapshot of where we are.
What I would report to you is—the term I would use is that our readiness is satisfactory, but it is not as high as it used to be. We have not been able to modernize. As a result of that, we are starting to see the impact of that lack of modernization. Much of our gear has exceeded its life expectancy, or it soon will exceed that.
Unfortunately, our infrastructure is not in good shape either, and what we frequently do is, we use our maintenance or real property account to fund near-term readiness. So our infrastructure is degraded as a result of that.
Our deploying units, on the other hand—and today we have about 24,000 marines who are forward deployed, as you said, sir, at the tip of the spear, so to speak. They do have high readiness; I think you can be assured of that. We insist on that. But as we said yesterday or the day before, often the burden for their readiness falls on the shoulders of the units who are left behind.
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What happens to them is, they get fewer marines, in our case, they get less equipment, at least less operational equipment, and they get less of that money which we consider to be the lifeblood of the Marine Corps.
As I mentioned earlier, we have several initiatives under way. As my colleagues have mentioned, some of those are reducing costs, but for the most part I see those as cost avoidances that are going to come hopefully in the outyears.
Today, in my view, the near term, the day-to-day strain on our readiness is actually increasing. For example, in the fleet's Marine force, an average repair action is twice as high this year as it was last year. At the depot level, again, it is more than double to do a rebuild at the depot level than it was before the gulf war.
Finally, I would just say, sir, that we are committed to maintaining our readiness, to working hard to do that, and just being as frugal as we can be with the dollars that you give us.
Again, thank you for your support. It has been important to the Marine Corps.
Mr. BATEMAN. Thank you very much, General Stewart.
[The prepared statement of General Stewart can be found in appendix on page 801.]
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Mr. BATEMAN. General Saunders.
STATEMENT OF BRIG. GEN. MARY L. SAUNDERS DIRECTOR OF TRANSPORTATION, DEPARTMENT OF THE AIR FORCE
General SAUNDERS. Mr. Chairman, Mr. Ortiz, members of the committee, thank you for this opportunity to discuss the Air Force's plans for meeting our readiness priorities in light of our declining O&M dollars.
Maintaining readiness in today's environment, as you have consistently heard this morning, requires a delicate balance of providing near-term necessities without sacrificing long-term investments in future modernization.
As we respond to these necessities, we are ever mindful of the criticality of effectively shaping our aerospace forces to meet the challenges of the future. Our focused effort on modernization capitalizes on a spectrum of feasible approaches to ensure continued air and space superiority.
By aggressive partnering efforts not only with the private sector, but with our sister services as well, we are searching for innovative ways to reshape today's Air Force to meet tomorrow's challenges. Through an exportation of validated best practices, the incorporation of cutting-edge technology and by reengineering support processes, we are identifying potential for streamlining our operating infrastructure.
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From acquisition reform and the use of commercial off-the-shelf products to partnering with industry and competitive sourcing, we are optimizing opportunities to free up resources and sharpen our focus on our core competencies. We are not randomly instituting personnel or program reductions merely for the sake of meeting modernization targets. Instead, our emphasis is on detailed, analytical reviews of our integral processes in order to capture greater efficiencies and increased economies.
Paramount in the entire review process has been our primary mission of providing this Nation with the aerospace power to rapidly project our presence anywhere in the world and at a moment's notice.
Thank you for your continued support and allowing me to appear before the committee today. I have, as you said, submitted my written testimony, and that concludes my statement, subject to your questions.
Mr. BATEMAN. Thank you very much, General Saunders.
[The prepared statement of General Saunders can be found in the appendix on page 811.]
Mr. BATEMAN. Well, thank you all. I would like to hear from each of you, if you are able to do this today, and if not, for the record, as to whether or not your 1999 budget submission reflects any shortfall in funding for real property maintenance and base operations. I suspect that they do. I guess it is one of the things that is inevitable as budgets decline and you have to make balancing judgments. But it would be useful to the committee at least to be able to quantify what the recognizable shortfalls in those areas are.
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Does anyone have any comments to make this morning, or is this something you would rather do for the record?
General WHALEY. Sir, our entire base support function, which includes base operations minus family programs, communication, audiovisual and real property maintenance, it is funded at about 78 percent of the requirement. I think our chief testified this week that there is a several hundred million dollar shortfall. I think his testimony was in the area of 600 million.
The Army will take it for the record and give it to you.
[The information referred to can be found in the appendix beginning on page 831.]
Mr. BATEMAN. Is this a figure or percentage that is getting better or worse?
General WHALEY. For over the program objective memorandum [POM] the percentage gets better. There is an investment strategy there to reduce the risk. Sir, I will not say any more. I will be quiet.
Mr. BATEMAN. I get very, very nervous about all those things we are going to get sometime later on somebody else's watch.
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Admiral SCUDI. We, too, will give you specifics for the record, sir, if I can take it for the record, but we believe the President's budget accurately reflects what we are doing in the restructuring and, in particular, the maintenance and real property.
We are a little closer to it in the regionalization of really physically, one building at a time, sorting this thing out, so we are pretty confident. But, if I may, I will give you specifics and dollar amounts for the record.
[The information referred to can be found in the appendix beginning on page 831.]
General STEWART. Sir, our maintenance and real property backlog in the Marine Corps, as we are here today, is $684 million. It actually gets worse in this budget. It grows to $814 million. We want to arrest that and we would need additional funding in order to be able to do that, sir.
[The information referred to can be found in the appendix beginning on page 831.]
General SAUNDERS. From the Air Force perspective, as we have talked earlier, we have a finite number of dollars, so that means making a choice about where we actually spend the funding.
I would like to take that for the record from the Air Force and provide you the figures.
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[The Department of the Air Force did not cooperate in providing a timely response for the record.]
Mr. BATEMAN. Reference has been made to, I think in the instance of General Whaley, of 50 million square feet of space being eliminated. This is not through a base closure, I assume.
General WHALEY. No, sir.
Mr. BATEMAN. You are just tearing down, getting rid of things that are not necessary which you, therefore, don't have to maintain any longer?
General WHALEY. That is correct, sir. What we have done—and with your support, by the way, congressional support for this operation—to the tune of approximately $100 million each fiscal year, we allocate that money to the MACOM's, we do a building-by-building, installation-by-installation view, prioritize that with the MACOM's, provide the money to the major commands [MACOM's]. They demolish typically World War II wood, where inventories are going down, forces are being downsized, there is no need for that building anymore. It is not good stuff that is being taken down. They get very minimum funds to caretake that.
We take no savings from the installation based on that. Any efficiencies they gain from that remains with the installation.
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Mr. BATEMAN. What is the experience of the other services?
Admiral SCUDI. A similar process, sir. The maintenance and real property asked about is inexplicably woven with our ability to demolish. I am sure that our Chief of Civil Engineers, Admiral Nash, was here last week, and perhaps he has better numbers for you.
I can't give you specific numbers, but internal to the Navy, it is a trade-off. Maintaining those buildings is too expensive and not useful, and they are not good workplaces for our employees. On the one hand, we are asking our employees to be competitive; we are asking them to restructure their workload. We have to give them the right kind of tools.
So we are in fact stressing the increase of the demolition of facilities that are not supportive from that industrial age, 1950, 50-year-old block obsolete stuff, and we are in fact trying to reduce the maintenance of real property.
Again, I will give you for the record that trade. It is a seesaw.
[The information referred to can be found in the appendix beginning on page 831.]
General STEWART. Sir, as I think you know, we don't have a whole lot of excess infrastructure in the Marine Corps, but we do believe in demolition. Thanks to this committee, we are going to spend about $5 million in fiscal year 1999 to demolish 172 buildings, and we think there will be significant payback for doing that.
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General SAUNDERS. From the Air Force perspective, I will take the specific numbers for the record. But I would say, as we try to maintain a quality of life and standard of living, that continues to be increasingly expensive, and so we start looking at how we deal with that excess capacity. We are afraid that what we end up with is a decrease in quality of life and living conditions for the people who have to do the work for us.
[The Department of the Air Force did not cooperate in providing a timely response for the record.]
Mr. BATEMAN. Well, this question and your responses have focused on real property and on buildings, but don't we have much the same problem with equipment, though I suspect it is much more difficult to deal with?
If you have got a vehicle that is 15 or 20 years old, it is probably eating your lunch to continue to maintain it as opposed to scrapping it. But if you have got a military requirement for x number of vehicles, you just can't scrap them. Is this a problem that you encounter?
General WHALEY. Sir, it is a little out of my line, but I think my experience will tell me that that is part of the balance that the Army is facing—the modernization, near-term readiness, quality of life and infrastructure, how do you balance all of those? That certainly is part of the balance.
I think historically we have not done the thing in modernization that we should have. I think the current budget reflects that we are going to do and have begun to do the modernization that we need to do.
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Where the risk now is—you have talked to the risk already today—that risk says, get as efficient as you can in your base operations. I am going to take some of that and put it into the modernization account. That is why the pressure is being felt in faces and places across the Army at the installation level, because we are asking those folks to enable the modernization of the Army.
Mr. BATEMAN. Does anyone have a further comment?
General STEWART. Sir, I think worn-out old gear is perhaps our biggest problem. We have a 65-percent rule which says, if it is going to cost 65 percent more than the cost of the equipment, that you don't fix it. We consistently have to exceed that rule.
I think I mentioned the other day when I was here, just for specific numbers, in the fleet Marine force, with marines doing the work, the year before last it cost $85 for the average repair order. In other words, kind of like when you take your car in for maintenance, the work order, this past year it was $150. So it is almost twice as high.
The amphibious assault vehicle which is really the workhorse of the Marine Corps at the depot level, $108,000 in 1991, $237,000 to do an overhaul this year. Our gear is old, it is worn out, and it is costing us more because we can't modernize. It just continues to go on for us.
As small as the Marine Corps is, we have a $53 million backlog in depot maintenance alone. So it is a strain to keep writing this off with old gear.
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General SAUNDERS. As we continue to look at ours, we also, as well, make a decision on a case-by-case basis of how much money, what is the end number, what is the return on investment when you continue to put money in old vehicles.
We obviously have looked at some work-arounds. For instance, commercial off-the-shelf products is one of the areas we are investigating. Fire trucks was one. Some other areas—de-icers—and we are looking at those types of things. Where we have special purpose equipment that is extremely expensive, but it is a must-have type thing, we are looking at trying to go with more commercial off-the-shelf products to purchase so we can make our dollars stretch further.
Mr. BATEMAN. Before turning to Mr. Ortiz, let me just make a comment.
At every hearing, almost every witness makes reference to the delicate balancing act that the various services and throughout the Department of Defense you have to do.
I understand that, and I am not being critical of those who use the expression and those who are having to determine, where is that balance. But at the end of the day, it seems to me we are clearly saying that this balancing act is dictated by the fact that there is an insufficient amount for real property maintenance and base support and quality of life and for short-term readiness and for modernization. That is what is forcing you to make these delicate balances.
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The only thing that is really going to help us improve is when we more adequately fund things so that you can make different judgments and different balancing that produces less risk, especially to future readiness, and especially readiness over the next 3 to 4 to 5 years, which I think we are going to be in a desperate plight if we don't stop this delicate balancing of factors, because ultimately it catches up with you. And I don't know when we get back ahead of the curve again.
Mr. Ortiz.
Mr. ORTIZ. Thank you, Mr. Chairman.
You know, I get a little nervous when I hear that we want to do business like industry and, you know, we follow their footsteps. But industry doesn't fight the war that you guys fight. So I think business has to be run a little differently, a different manner.
The equipment General Stewart was talking about, not only is it outdated, but what happens to the individual soldier, to his life if he doesn't have the equipment to really respond to the need? This is very dangerous, and this is why I worry that everybody wants to run business like you run a business, but defense can't run a business like that.
It is different, because a businessman can go to the bankruptcy court and file bankruptcy. You can't. You either stay alive or you die.
One of my questions today would be, for all the services, where is the money coming from to pay for commercial activity studies? Where did you get the money from?
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General WHALEY. Sir, the Army funded that money. It is O&M dollars obviously, and it is being funded to facilitate some of your concerns; and I think Mr. Warren's testimony also, the analysis and the follow up—did you make the right decisions when you went through it; did you have a plan?
The money is provided to the installations that are doing the studies, so that that installation coming in can make an informed, deliberate decision, do the economic analysis the way it is supposed to be done, and then end up with a plan that not only achieves the most efficient organization, whether that be contract or not, but with confidence that he has done it in a way that can stand the scrutiny of all parties involved.
Admiral SCUDI. The Navy's answer is, in the near term, it is out of operations and maintenance. That transitions to cash out of the savings. If the savings do not accrue, we stop doing the studies in the outyears.
Mr. ORTIZ. Any idea how much money we are talking about?
Admiral SCUDI. Yes, sir, if I may. $160 million over the fit-up, sir, if—and if I may; I will submit for the record the yearly investment and then when it goes to savings.
[The information referred to can be found in the appendix beginning on page 831.]
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General STEWART. In the Marine Corps, we have funded $34 million out of the O&M account starting in this fiscal year, and running through fiscal year 2001, with the expectation that we are going to begin saving and ramp up to $110 million a year in fiscal year 2004 and then be able to sustain that savings in the outyears.
Mr. BATEMAN. So this is all coming from O&M accounts?
General STEWART. Yes, sir.
General SAUNDERS. I would like to take the specific amount for the record, but I would say, addressing your concern, that, in fact, we are not like civilian industry. So when we do make changes and reengineer and so forth, that is why we consider we are a partner with them.
Let me give you a good example. We are running some reengineering efforts in travel. We have, since I have been in the service, used the government bills of lading, where the civilian industry uses civilian bills of lading and we are working those processes. And we are sitting with—we being DOD, all of the services—GSA and all of those folks involved, sitting with UPS, Emory, FedEx, sitting side by side, figuring out how we do this.
These are places where we can save money and make a change to the process without impacting adversely warfighting kinds of skills. We can, in fact, contribute money to those warfighting kinds of skills.
We talked earlier about and the concern was made toward talking about ''just in time,'' and you are exactly right in transportation, and we stopped saying that long ago, because it doesn't work. When you are talking to a CINC, he doesn't want to hear that. That is why we go to time-definite delivery.
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When I travel overseas, and I am talking to the folks in Europe, and I go to base x, and I am talking to the office of logistics folks, I tell them, if I tell you that I can get you a part in 3.5 days, then you expect to get it.
My question to you is, are you getting the part? If the maintenance people are telling them it is that time, 3.5 days, plus 5 hours of repair time, and I can give you an airplane to fly a sortie, they expect that to happen. Those are the kinds of things that we are working on, because we recognize we are not just like civilian industry. But we partner where some of the things we can do make sense, give modernization dollars, but it does not impact our warfighting capability.
Mr. ORTIZ. Thank you.
I have another question for you, General Saunders. Maybe you could explain the Air Force position on COCESS, the contract for opperated civil engineering supplies stores. It appears the bundling of COCESS to larger base operating service contracts reflects a policy decision by the Air Force that it is anticompetitive. Can you enlighten me on that?
General SAUNDERS. I would say, sir, that that, in fact, is not the case; and one of the things that we consider when we are looking at these types of processes, when you start talking about bundling, is consideration for small business, because that is always an issue. But I can get specifics for you, if you would like to know the entire process that they went through.
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[The information referred to can be found in the appendix beginning on page 831.]
Mr. ORTIZ. Yes, if you can.
General SAUNDERS. I can do that.
Mr. ORTIZ. The same question for you all. What about bundling? If you have that, how does it impact on minorities, if you bundle a big contract?
General SAUNDERS. I would make one additional comment about that. One of the things that we have found across the spectrum in the areas is that when we do these types of things, sometimes industry is not really ready to provide the service that we are asking for, because they are such large numbers. But what we need, in fact, is industry reinventing itself in order to meet our requirements.
One of the things, just kind of an issue that has come up, is talking about maybe the use of a relocation service. They don't exist in large numbers. But you look around industry, and they are starting to merge with other units to create associations.
So what we find is that in a case where you might have a large contract that has gone to an entity, in fact, there are other smaller entities that have become a part of that in order to provide the service, because the requirement is so massive.
Mr. ORTIZ. Thank you. Anybody else?
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Admiral SCUDI. I will comment, sir. You spoke with Admiral Clemins and Dr. Hamre. I believe they have got it right. The solicitations for contracts are open to everybody. There are no specific set-asides for small or large. There are opportunities for small companies to find their niche market and support in that.
We are very sensitive when we bundle in a place like Guam that we don't open that up. So we are working a general contractor philosophy. We believe there are subjects in niche markets for a lot of these companies.
What used to be, everybody was on the GSA schedule; it is no longer true.
By the way, that happens for F–22's and assault vehicles too. We are down to a number of what we would call system integration weapons systems suppliers; and they need, as well, to think through internal competition, external competition and subjects. So we are exactly in the same situation as our colleagues buying the next generation of weapons. We are here to get some cash out of the infrastructure so they can buy those.
It is exactly the same problem, and we are very sensitive to that.
Mr. ORTIZ. One of the reasons I asked is, how about experiences where a manufacturer builds a certain product, and then when it is time to be ready to go competitive, they would not give out the specifications so that the people who do the in-house work can compete on this product, whether it is an airplane or a tank, and it is very hard for anybody to compete, because they do not have the specifications? I don't know whether that has happened to you or not.
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I know the Marines, most of your work was being done in house, and now that has been changing little by little. As you stated, maybe because your equipment is old, it is beginning to be more costly to maintain the equipment.
General STEWART. Our equipment is more costly to maintain.
Actually, sir, you are referring to depot maintenance, I believe. We really have not outsourced any more of that. We are holding pretty much to the way we have always done it, which is pretty much organically. We are at about 95 percent organically, and it is really kind of holding to that.
Mr. ORTIZ. A benchmark.
General STEWART. It worked best for us.
General WHALEY. If I might, sir, on the small business aspects of the A–76, I have personally spoken with the director of the SBA, I have spoken with every one of our MACOM's and most of our installations. This is a teaming-partnering thing that needs to be done. There is a win-win in all of this.
This is A–76. In our case, not a whole lot of large, huge contracts here. And what I have asked the MACOM's, with their installations and regional local SBA offices, is to sit down at the beginning of the process and say, this is what we are going to do over the next several years. Let's sit down and work this together, so that we can find a win-win for both the commercial sector, the SBA, the installation, the MACOM, and the Department of Defense. She has facilitated that in several different ways, and we continue to touch base.
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One more thing on the A–76, sir. If there is an issue that all the services are holding hands, exchanging lessons learned, and trying to do it right on, this is one of those issues. I have been to more meetings, symposiums, and conferences where we are trying to do this right.
We have heard you, and we hear our own people. This is counterculture, and we want to do it right. The motivating factor is the future of the Army and the future of the services and taking care of all of our people while we are doing it.
Mr. ORTIZ. Thank you, General.
Thank you, Mr. Chairman. I would like to submit some other questions I have for the record.
Mr. BATEMAN. Certainly.
[The information referred to can be found in the appendix beginning on page 831.]
Mr. BATEMAN. Mr. Underwood.
Mr. UNDERWOOD. Thank you, Mr. Chairman, and thank you for your testimony. Just a question on General Saunders talking about ''just in time'' logistics. I made reference to that because in all the Secretary's defense briefings, we always get that. Maybe you ought to pass that word along.
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General SAUNDERS. They are changing.
Mr. UNDERWOOD. I think it is becoming—based on what we are hearing from your level and others, it is becoming a bit of an embarrassment.
General SAUNDERS. Well, another comment.
One of the things we talked about, and I have it in my paper, we talked about lean logistics for a long time. We are finding again that is really inappropriate. It is great, as you said, if you are talking about General Motors, because they know what they are doing.
Now we talk about ''agile logistics,'' how do we get what we have, when we need it, where we need it. So we need agility. But just being lean is not always the answer if you are not giving the CINC what they need.
Mr. UNDERWOOD. I am glad about the discussion on A–76, because obviously that is an issue that affects my area directly. But I did notice in your comments, General Whaley, in your written testimony, that you outlined that the Army has conducted 468 cost competition studies, and whenever there is a discussion of these cost competition studies, I have heard a lot of statistics about the money that is saved.
I have also heard the statistic given to me that the most efficient organization wins around 50 percent of these.
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What I would like to know—and maybe each of the services can provide this for the record if they don't know right offhand—when the most efficient organization actually wins in those competitions, what does that represent in terms of the total jobs affected and the total cost of the activities? Because when that 50 percent statistic is thrown around and you are talking about competing out 20 jobs versus competing out 400 jobs, and the 20 jobs wins; they won half.
And I am not sure that is a statistic I want to share with the people who are undergoing these cost competition studies. So I want to get a real clear picture of that. Can you offer any commentary on that now?
General WHALEY. Sir, I think the GAO has those specific ones. We have looked at most every one all the services have done. I had the same concerns you did that you can do things with statistics, so I went back and I read most of those GAO reports. Some of the little ones won, some of the little ones lost. Some of the little ones had high savings, some of the little ones had small savings. The same for the medium and small size. It is an equal distribution.
So the statistic of 50 percent is about right. The statistic of 28 to 35 percent is about right in terms of savings. The exact numbers of people, I don't have, that were affected. I don't know what that was.
The other statistic that kind of runs through it is the work force remained, 92 percent of the work force remained constant.
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Now, certainly if it was in house, they stayed there. And even if a contract offer won, many of those employees were hired.
Another thing that we have done to kind of offset this, this is essentially a 4-year process for us. In 1997, we said, start your first studies, announce them in 1997. Get them completed by the end of 1998. We will only take 20 percent savings overall; we will not take the 28 percent. We said only 20 percent, because there is some answer around that 28 percent.
Not only that, in the third year of an equation, we will only take half that 20; and in the fourth year, we will take the full 20 percent. So we have kind of eased into this thing on the savings side over a 4-year period, so that there is room to maneuver in there if we have a problem; and we have safe-sided it, I think, better than we have historically. Where the average has been 28 to 35 percent, fine, take 20; and only take half of that in the third year, full up the fourth year.
Admiral SCUDI. There is one that I think will be interesting to you specifically, sir, and that is the fuel operation in Guam. The defense fuel supply point in Guam, the decision was made to stay in house. In fact, the government employees are pretty effective at this. The annual cost before the competition—and this is why we think competition is the word—was $1,391,000 to operate the facility. After the cost comparison, it was $951,000. The annual savings are $418,000, which we can expect to save.
The original organization was 19 full-time-equivalent folks, and the most efficient organization that will now continue is 11 individuals.
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Now, there begs the question. This is a human dynamics problem. So we had, if not legally, certainly morally, that responsibility to train, cross train and retrain our workers. So we are very clearly focused on skills inventories and the regionalization process, such that we would recognize that you will be leaving PBX switches and IT and going to Webmasters, or you will be leaving—this is a very real problem. We are just in the beginning stages of that, and we will give you more information as that goes, if we may, because the human dynamics is really the interesting part of this change. The rest of this is mechanics.
To support my colleague in the Army, our savings really aren't even projected until after the turn of the century, so we are in the investment phase. We are thinking through the skills inventory region by region, the human dynamics, what businesses to do, and we need to equip our folks in the process to be competitive.
Mr. UNDERWOOD. General.
General STEWART. Sir, I think as you know, we don't have many civilians in the Marine Corps. In fact, we have a marine to civilian ratio of 10 to 1. We have not done any A–76 studies for a long time. Back in the 1980's was the last time that we did any of these. I don't think we have anybody still on active duty in the Marine Corps who knows what happened. I could get you some data on what happened in those studies, but recently we have not done any.
We are a little bit behind. We were funded in this year to actually get this started. Our plan is to look at 5,000 full time equivalents [FTE's] over 4 years, and what we have always done in the Marine Corps is to try to be as fair as possible to our civilians. We have a policy out that the plan would be to try to retain civilians to the maximum extent possible, and that is signed by the Commandant. We think that is necessary because we are actually asking—these are the same people we are asking to look at making their organization more efficient or perhaps even having their organization go away. So we need to take care of them the best we can.
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Mr. UNDERWOOD. General Saunders.
General SAUNDERS. For the Air Force, we are looking at about 7,000 positions for 1999. Historically the most efficient organizations [MEO's] have been winning about 35 percent of the time and what we end up counting is a 20-percent savings. If you would like to know some of our recent MEO wins, I can provide that information for you.
Mr. UNDERWOOD. I am very interested in the number of positions affected. Because you know, I have heard the statistics, and you said 35 percent have won, but overall I have heard the statistic that half of the MEO's have won, and I don't want to mislead people or give them false hopes in that regard.
Just on the issue of the A–76's, one of the concerns I have, and this pertains particularly to what has happened on Guam; but in general, is the fact that in advance of actually completing the study, it seems that there is a lot of discussion about possibilities and sometimes the discussion of the possibilities has certainly outstripped the process, and certainly in Guam that has clearly happened. It has irritated me to no end, irritated is a mild word I am using, but certainly it has outstripped the process.
And now I think we are back a little bit on track, partially as a result of the typhoon and so on, but you know, the process is supposed to be straight up. You are supposed to have an MEO, you are supposed to allow small businesses the opportunity to take a look at it, and in this particular case, they were so focused on the potential of a battlefield operating system [BOS] operating system contract that it got a little bit ahead of the schedule. Am I incorrect in my assumptions, Admiral?
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Admiral SCUDI. No, you are not. I trust that Secretary Perry has contacted you, and it is clear that there is a 90-day delay in the thinking process going on.
Mr. UNDERWOOD. The last item I have is just on utilities. Major General Whaley, you indicated that the Army is kind of getting out of the utilities business, and I assume that that is true across the services. Is that correct, Admiral Scudi?
Admiral SCUDI. It is true. It is a Department of the Navy initiative as well. Requests for information will be done on a regional basis. Regional commanders will ask about it. We don't believe that there is one solution to any Navy installation. There are no tube socks in the Navy. I don't think it is very different than San Diego.
Based on the responses from our inquiry, we will conduct a cost analysis at each site, talk with the municipalities and commercial interests, and see what the interest has shown. We have already held an industry forum in anticipation of deregulation of that industry, to see that we are not being snuckered. We use an awful lot of electricity in shipyards.
So then we would shift to a request for a request for proposal [RFP]. You would clearly be informed, and in part of this process we expect in the next 24 months that we will be starting this, thinking that through in a more logical fashion than perhaps we might have, had we not had these kinds of discussions. Yes, sir. We think we can save probably $60 million.
General STEWART. Sir, we are also working to privatize utilities. We have actually done the studies at two of our bases, Marine Corps Logistics Base in Albany and at Camp Lejeune. I could be wrong, but I think we have been directed to do this by OSD, so it is really not——
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General WHALEY. Correct.
General STEWART [continuing]. So it is really not optional. We are moving out to do what we are told. I would say that it is emotional, just like all of this competition. There are real people who are patriotic, who have done great work for the Marine Corps and we call them civilian Marines, who are doing this at our bases and stations, so it will not be easy.
General SAUNDERS. For the Air Force, we have 22 systems already privatized. We have 4 pilot projects, and one of those was Scott wastewater plant, Edwards Air Force Base; at the Hill, industrial waste water; and at Langley, the electrical and gas distribution system. And we also have 240 additional systems under study as possibles.
General WHALEY. Two more pieces, if I might, sir. One is that I think it is about 30 that we have analyzed already that will not be privatized, either because it is not economically feasible to do so, not operationally feasible to do so, or there is just no competition. So it is, again, not a cookie cutter piece.
Both for the utilities piece and the A–76 piece, one of the things that we all find ourselves talking about, not only within our service but amongst the service and with the industry, is the culture and people piece of this thing. The entire effort is sensitized to that, to include installation commanders.
Probably the worst danger is rumor or nonfactual information in many cases, the information to our civilians and our military members, for that matter, on what is going on, when is this going to happen, how does it work. There is a great effort, I think, in all of the services to make sure that as best that we can, we get that kind of information to our folks as well as our congressional leaders in a timely way so that it is not surprise, surprise.
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Mr. UNDERWOOD. Well, thank you. You know, with this discussion, Mr. Chairman, of revolution in military affairs and business practices, I am waiting for the revolution in Congress.
Mr. BATEMAN. I feel it coming.
Well, we thank all of our witnesses.
One last area of concern as we focus so much on this A–76 process is that in those instances where the judgment is made that it is better, more cost-effective to contract out or privatize, has anyone tracked any data as to whether or not the validity of that decision has proven correct over time? The sensitivity here being, you decide to contract out, you lose your in-house capability; what is happening and driving perhaps the original costs up, up and up, and can you give me any meaningful information on that?
General WHALEY. Yes, sir; it is either triple A or GAO looked at 10 of our contracts that had been contracted out historically. And some of that—and I think it was GAO, if I am not mistaken. Mr. Warren addressed this.
What they found was yes, there had been cost increases, but the contracts had also changed, the scope of the contract had increased. So it wasn't apples to apples. They also found that we could have done a better job in tracking—first, establishing the baseline in a formal way of what the first contract was, and then tracking on an annual or periodic basis any cost growth along with change in scope of contract or quality, et cetera.
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Admiral SCUDI. The Navy is exactly the same. Data will be submitted, sir, exactly the same. We feel the door swings both ways and we can bring it back in-house. The only example that comes to mind is in King's Bay we have gotten out of the pilot business and found out we couldn't afford the commercial pilot and brought it back in-house. So we will see more of that, we will be prepared to do that, and we will make it a level playing field both ways. But for the record, sir, we will give you the GAO analysis. It is exactly the problem, creep and change and redefinition.
General STEWART. Sir, we haven't done any A–76's to have the data on it, but as an example, we have an operation at Blunt Island near Jacksonville, FL. It is our maritime pre-position force maintenance operation. I think it is really important.
That was started up as a contractor operation. We actually leased the property, but the maintenance is done by contractor, and of course we do attract that. It has worked quite well, and that cost has actually gone down, so that is the one example that we would have that it is working.
General SAUNDERS. The Air Force will provide information for the record, but I would like to make one comment. One of the things that I think was mentioned by the previous panel, one of the things that we are really hitting hard now as we start the A–76 process is metrics, to pay attention.
For instance, in the Air Force we have several crosscutting committees. We talked about stovepipes and problems when you have people who just kind of think in one direction and we have made a great effort not to do that.
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In information logistics, for instance, we have a standing committee working these things all the time. So we are looking at not only what the cost is, what happens after that: How is the MEO actually working out? How is it affecting the specialty of the military who are involved in the process of out-inspecting the communities? So all of those things we are looking at from a metrics perspective, unlike probably we didn't go into this depth in the past because it certainly wasn't done in such large numbers.
Mr. BATEMAN. Well, with that, the committee thanks you very much. Your testimony has been very helpful to us, and we appreciate the dedication and capability that you bring to the table, and the services that you perform for your various departments. Thank you again.
[Whereupon, at 12:10 p.m., the subcommittee was adjourned.]
The official Committee record contains additional material here.
QUESTIONS SUBMITTED BY MR. BATEMAN
Mr. BATEMAN. Based on previous or ongoing studies, what evidence does GAO have that the Defense programs supporting the savings estimates in the fiscal year 1999 budget that the Defense Reform Initiative are executable? Can you verify that such savings are methodologically sound and achievable in the time frames established by DOD?
Mr. WARREN. Although the DRIs are divided into four major areas, DOD has only highlighted two of them-additional BRAC rounds and public-private competitions under OMB Circular A–76—to produce any significant degree of measurable savings. DOD expects, for example, that two additional BRAC rounds, one in 2001 and another in 2005, will require an estimated up-front investment of $12 billion but will save about $14.5 billion during the base closure implementation period. In addition, DOD estimates that each round will save $1.4 billion a year after the closures are completed. Likewise, DOD projects that, starting in fiscal year 1999, it can save about $6 billion over the next 5 years and $2.5 billion each year thereafter by subjecting more of its business and support activities to competition using the A–76 process.(see footnote 1) DOD has projected BRAC costs and savings in its current Future Years Defense Plan. These include $0.8 billion in FY 02 and $1.4 billion in FY 03 to pay for the initial implementation costs of new BRAC rounds.
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As we stated in our March 1997 report (Base Operations: Challenges Confronting DOD as It Renews Emphasis on Outsourcing, GAO/NSIAD–97–86, Mar. 11, 1997), competition is the key to realizing savings under the A–76 process. These savings usually occur through a reduction in personnel regardless of whether the competitions are won by the government or the private sector. We have urged caution, however, about accepting at face value, the magnitude of projected savings cited in various DOD studies, including the DRI report. These savings estimates are often heavily premised on initial savings estimates from previous outsourcing efforts. We have identified three potential problems with this approach. First, such estimates change as the scope of the work and wages change, but DOD does not update its savings rates and projections accordingly. Second, the savings rates used in DOD's estimates are based on outsourcing competitions conducted before the onset of significant personnel reductions in DOD. Therefore, the projected savings rates in the future may not be as high as those achieved during the 1980's, because some of the inefficiencies associated with personnel have already been reduced. Third, mission and programmatic changes that occur after A–76 completions are completed make it difficult for DOD to effectively track costs and savings over time that result from them. Consequently, we cannot verify the extent that A–76 competitions actually achieved their savings targets. The Defense Authorization Act for Fiscal Year 1998 amended 10 USC 2463 to require that DOD maintain cost data on contracted out functions for the term of the contract or extension, but not to exceed five years. The Act also requires DOD to collect cost information on certain functions brought back in-house for a period of 5 years. This information is to be compared with the estimated costs of continued performance of such activity by private contractor employees. We would suggest the Committee also consider requiring DOD to maintain cost data on functions that are currently performed by the government and are won by the in-house ogranization. This information would provide a more complete picture on the results of the A–76 initiatives.
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We also have question about the services and defense agencies ability to achieve the savings in the timeframes established by DOD. Our preliminary look at the services' A–76 competition plans shows significant shortfalls and risk in each of their programs. The Air Force, for example, performed an analysis that identified the specific functions that will be studied by base. However, it made some assumptions that differ from past experience that could overstate the number of civilian positions that can be cut by as much as 6,900. The Air Force recognizes this issue and considers their outsourcing stategy high risk. The Navy and the Army, on the other hand, have not yet identified the majority of the specific functions that will be studied by location. Yet, the Army has developed a plan that assumes all civilian positions in commerical activities can be competed. While this may be possible, the Air Force found it was impractical because many of the positions are spread across several units and locations. According to OSD officials A–76 plans of the defense agencies are still preliminary and are not available for review. The DRI report indicates that these agencies will cut about 21 percent of their workforce, which equates to approximately 27,300 positions.
Mr. TUTTLE. Our recent and ongoing studies support the Department's general contention that considerable resources could be freed for other priority defenes needs by adopting innovative commerical business practices, conducting public/private-sector competitions for selected support funications, and eliminating excess infrastructure. LMI, however, has not been asked to assess the savings estimates in the DOD budget and Defense Reform Initiative, so I am unable to judge if they are executable.
Mr. BATEMAN. The Committee is concerned that projected outsourcing savings will not be achieved at the pace and magnitude DOD has planned. If DOD does not achieve savings, what information does GAO have about what impact this may have on the Operation and Maintenance budgets of major commands and installations?
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Mr. WARREN. From the preliminary information we have collected to date, there appear to be instances where DOD has cut the operations and maintenance budgets of major commands and installations before savings from A–76 competitions can be achieved. In these situations, DOD may have to (1) delay funding of planned operations and maintenance activities at the major commands and installations, (2) reduce planned funding for modernization increases, or (3) seek additional funding from Congress. We are concerned that the most likely response to savings shortfalls will be to place significant additional unplanned burdens on the major commands' and installations' operations and maintenance budgets. This could possibly affect either readiness or the quality of life of our soldiers.
Officials at the Training and Doctrine Command (TRADOC), for example, told us that the Army has projected savings of 20% for their A–76 competitions and has reduced their operations and maintenance budget accordingly. They pointed out, however, that funding for base operations has already been reduced by 40% since the mid-1980s. Therefore, they said that additional reductions of approximately 20% are probably not feasible.
In addition, a TRADOC official told us that the projected savings are being taken from TRADOC's operations and maintenance budget before A–76 studies are completed and savings have actually been achieved. For example, TRADOC currently has the largest on-going A–76 study in the Army-a review of about 4,000 positions in a phased, multi-function, multi-site study—and has plans to announce future studies involving another 9,653 positions. The TRADOC official told us that TRADOC does not expect to complete the first phase of the current study until at least the last quarter of fiscal year 1999 and will not complete the entire study until at least the third quarter of fiscal year 2000. In addition, full transition may not occur until three to six months beyond the date projected for a variety of reasons, including the possibility of bid protests. However, operations and maintenance budget reductions occur in fiscal year 1999, before the study is complete. TRADOC officials expect to absorb the anticipated savings shortfalls in their O&M budget, very likely by delaying real property maintenance.
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Furthermore, TRADOC officials told us that any military positions eliminated through A–76 competitions will be move elsewhere in the command or the Army as will their related Military Personnel, Army (MPA) funding. Functions performed by these military personnel must then be performed by either civilian or contractor personnel and funded through TRADOC's operations and maintenance budget. TRADOC officials believe this will create an additional operations and maintenance budget requirement of between $50 and a $200 million, depending on the number of military positions that are transferred.
Logistics Management Institute (LMI)
Mr. BATEMAN. According to your testimony, LMI has been working with DOD and the Military Services to develop business efficiencies through electronic commerce, improved inventory management, and acquisition reform. What evidence do you have that such programs are being implemented at the lowest levels in defense?
Mr. TUTTLE. Reports to Congress, the testimony and speeches of senior leaders, my discussions with DOD people (civilian and military), internal reports/data, and the results of our recent and ongoing studies all lead me to believe that such programs are being implemented at the grass roots level within the Department.
Mr. BATEMAN. Based on your work, do you feel that DOD has devoted adequate resources to conducting competitions and implementing the results?
Mr. TUTTLE. Our studies and my work on the DSB suggest that the Department is committing substantial resources to conducting competitions and implementing the results. They do not, however, enable me to form an opinion regarding the adequacy of those resources.
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Mr. BATEMAN. A recent Air Force Office of Special Investigation report states that greater outsourcing efforts run the risk of increased contract fraud. Recoveries from contract fraud in the Air Force, in fiscal year 1997, totaled $199 million. Do GAO studies support such findings?
Mr. WARREN. As far as our work is concerned, we have not completed any studies that address how increased outsourcing efforts will affect the risk of contract fraud. However, we have some information on the Air Force Office of Special Investigation report, titled Semi-Annual Report on Fraud Operations, 1 April 1997–30 September 1997. The report was prepared to give the Air Force leadership a summary of the Office of Special Investigation's activities and communicate concerns that it has about Air Force operations, plans, and programs. We discussed the report with a representative of the Office of Special Investigations—specifically the section of the report that addressed contract fraud—who told us that the Office was not able to quantify the amount of fraud that might exist in the universe of Air Force contracts. The $199 million identified as fiscal year 1997 ''recoveries'' in the report does involve contract fraud; however, almost all of this amount involves fraud associated with major weapon system procurement and related contracting activities. The Office of Special Investigations representative told us that it was unlikely that any of the $199 million was associated with contracts that resulted from A–76 competitions. The report simply pointed out to the Air Force leadership that increasing A–76 competitions would likely increase the number of contracts awarded by the Air Force which, in turn, would likely increase the exposure to or risk of additional contract fraud. The Office of Special Investigations also raised this issue to let Air Force leaders know that, without additional resources, the Office may not be able to provide the same level of investigation over contracting activities—either a smaller percentage of contracts would be covered or it will take longer to provide the same level of coverage.
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Mr. BATEMAN. What do you feel is DOD's greatest challenge in implementing the outsourcing program envisioned by the Defense Reform Initiative?
Mr. WARREN. DOD's greatest challenge is effective and efficient implementation of their A–76 competition program. Successfully implementing the program requires a top to bottom management commitment. DOD has launched an A–76 competition effort of unprecedented scope and magnitude compared to prior efforts. DOD is planning to announce studies of over 220,000 positions between 1997 and 2001, compared with having completed studies for about 95,000 positions between 1979 and 1996. Adding to this challenge, it is not clear that DOD has fully identified the up-front costs and impact on on-going operations of conducting the hundreds of A–76 studies that it will take to assess the 220,000 positions nor have they analyzed whether they have the necessary resources to implement and oversee the results of the competitions. In addition, as I mentioned, DOD is undertaking this effort without a means of effectively tracking the costs and savings that arise from the competitions.
Each of these implementation issues needs to be addressed and that is why we are suggesting detailed implementation plans for each of the business areas that are impacted by the A–76 initiatives. It is unclear to us, based on our preliminary work, whether DOD has fully developed a strategic roadmap that links the A–76 programmatic goals to the reengineering, consolidation, and elimination efforts that are also underway or that describes how DOD will limit unnecessary overlap and duplication of efforts between the various DRI initiatives. Such a strategic roadmap would aid DOD in fully developing implementation plans that identify and prioritize the functions that will be competed in order to achieve the largest return with the limited resources that are available.
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Mr. TUTTLE. My experience suggests that the greatest challenge associated with implementing the outsourcing program envisioned in the Defense Reform Initiative will be to change long-standing beliefs within DOD and Congress regarding which specific functions/activities must be performed by government employees because they are inherently governmental or are mission critical and which functions/activities could be outsourced to the private sector.
Efficiency Savings
Mr. BATEMAN. What are the programs behind the efficiency savings in the fiscal year 1999 budgets? What is the status for the implementations of these programs?
General WHALEY. The programs included in the FY 1999 efficiency savings are lease reductions, energy conservation, utilities modernization and A–76 competitive sourcing studies. These programs have all begun implementation in 1998 and are proceeding as planned.
Admiral SCUDI. Efficiency savings included in the 1999 budgets are a result of several programs. These include BRAC, regionalization and claimant consolidation, utility rate reductions, energy conservation and better business practices at the installation level. Most BRAC reductions will have occurred by FY99 and will provide some of the significant savings needed for our shore installations to operate efficiently. Additionally, savings planned from claimant consolidation and regionalization efforts are on track with significant progress having already been made in major fleet concentration areas such as San Diego, CA and Hampton Roads, VA. Savings from utility rate reduction negotiations and energy conservation are also on track for FY99. Shore installations are also continuing to save money as a result of local initiatives to reduce, streamline and consolidate base support functions.
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General SAUNDERS. The Air Force carefully crafted a FY99 budget that maintained the delicate balance between readiness and force modernization. Given fiscal realities, we achieved this balance by making tradeoffs, and challenging our wing commanders to achieve a number of efficiencies and operate within certain funding constraints. For FY99, these efficiencies/constraints include funding Depot Level Reparables (DLRs) at 95% of requirements, Depot Maintenance (DPEM) at 83%, Real Property Services (RPS) at 95%, Base Operating Support (BOS) at 76% of FY96 actual expenditures, and Real Property Maintenance and the Preventive Maintenance Level (PML). We are also aggressively pursuing competitive sourcing initiatives to achieve the savings we have identified. While these efficiencies in our budget are based upon past accomplishment, the margin for error is growing ever smaller compared to past standards. As we execute the budget in FY99, the assumed savings will challenge the resourcefulness of our wing commanders, but the challenge is one we fully expect to meet.
General STEWART. The Marine Corps has implemented competitive sourcing and privatizing programs to achieve savings for procurement modernization. The Marine Corps is currently positioning for initial 4th quarter FY98 implementation.
Savings
Mr. BATEMAN. What will happen if you do not achieve the savings projected in the fiscal year 1999 budget and the Five Year Defense Plan (FYDP)?
General WHALEY. If the savings are not achieved, funds planned for additional modernization programs will likely be delayed.
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Admiral SCUDI. Failure to achieve the projected FY99 savings from Base Operating Support reform initiatives will result in a one for one migration of dollars from other O&MN sources to fund the shortfalls.
General SUNDERS. We fully expect to achieve the savings projected in the President's Budget. However, savings by their very nature are subject to some uncertainty. Savings are reallocated through numerous decisions made as part of the normal planning, programming and budgeting process. Therefore, since the nature of these savings shortfalls are unknown, it is premature to speculate on specific courses of action the Department might take.
General STEWART. If actual savings returns differ from planned assumptions, reductions will be taken from our procurement account.
Business Reform Initiatives
Mr. BATEMAN. What up-front investments are required to implement these various business reform initiatives? To what extent are you giving the major commands and installations the funding needed to meet those investment needs, or are they asked to take it out of hide?
General WHALEY. Lease reduction requires investment costs for both renovation construction and relocation. Modernizing central heating plants and distribution systems that are not economical to be privatized saves energy, increases their efficiency, reduces future operation and maintenance costs, and lowers emissions. Although some costs have been borne by the major commands and installations, the primary beneficiaries of reduced utility costs, much has been funded centrally. The A–76 studies only require the investment to preform the study, which included developing the in-house Most Efficient Organization, obtaining contract offers, and performing the cost comparison. Most of the up-front investments are centrally being funded and others must be absorbed by the major commands and installations. All costs associated with the conduct of A–76 studies are borne by HQDA.
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Admiral SCUDI. On-going shore restructuring efforts generally fall into two categories. Some initiatives focus on changes in management structures and processes which can be implemented with little up-front investment. For these efforts, the Navy has asked that its major claimants make any minimal investments required to achieve the efficiency, and then recoup this investment from the savings generated by the initiative. Some other restructuring efforts, such as our competitive sourcing effort, are significant enough that a major Navy-wide investment of funding is required to obtain the significant projected return on investment. In this case, the Navy will make an up-front investment of $141.5 million in FY98–FY03 to support our major commands and installations in conducting commercial activities competitions utilizing the OMB Circular A–76 process. This investment is set up to provide technical support for implementation at the commands through the use of professional consultants. Each activity is provided $2,000/Full time Equivalent (FTE), or roughly 20 hours of contractual support, for each person (FTE) under study. In addition, support is provided to commands through the Competitive Sourcing Support Office. This support includes providing regional support coordinators, administration of contractor support and A–76 process guides and templates. At the activity level the critical element to ensure the success of the program is the Commercial Activity Process Action Team. This team is made up of key members of the Command who serve as the driving force in conducting the study within their activity. The use of local expertise plays a critical part in establishing the requirements for performance work statements (PWS), in developing the quality of the Most Efficient Organization (MEO), and the Management Plan as required by OMB Circular A–76. The costs of the in-house team is borne by the affected activity.
General SAUNDERS. There are several on going business reform initiatives that will allow us to do our jobs more efficiently and effectively; thereby reducing the costs of developing, procuring and operating Air Force weapons systems. These initiatives include Outsourcing and Privatization, the Defense Reform Initiative Directives (DRID), the National Performance Review (NPR) Goals and Reduction in Total Ownership Costs.
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The Air Force recognizes that several of these initiatives will require an upfront investment to gain the benefit of long term savings. For example, the DRID for Paper Free Contracting will require an investment in additional information technology infrastructure. The NPR Goal on activity based costing (ABC) will require the Air Force to invest in ABC systems development, installation and training, The Air Force will identify these necessary investments and integrate them into our Air Force corporate processes and the PPBS cycle. The Air Force does not plan to make the Air Force Major Commands or local installation commanders pay fore these investments. However, resourcing the necessary investments will have a short term impact on the overall Air Force budget until the longer term cost savings are achieved. These budget impacts will certainly affect the Air Force Major Commands and the individual installations in the short term (1–5 years) as the necessary investments are made.
General STEWART. $34 million between FY98 and FY01. A majority of this is to go to installations for contract assistance, training, cost modeling, etc. In-house manpower resources required by installations to undertake the A–76 process will have to come out of hide.
Regionalize Functions
Mr. BATEMAN. To what extent have you benefited from departmental and service initiatives to regionalize or consolidate various functions such as finance, personnel, base operations, and contracting? To what extent, if any, have your efforts to regionalize or consolidate across service lines, has increased inter-servicing in the base support area? What impediments, if any, exist to making further inroads in this area?
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General WHALEY. To date, we have regionalized the Defense Financial Accounting System and civilian personnel functions and are considering consolidations of in-house Directorates of Logistics (DOL) and Directorates of Public Works (DPW) as part of the A–76 studies. As each installation is completed, the solicitation for private sector offers will include both DOL and DPW functions in the performance work statement. Thus, if the result of the cost comparison for the installation is conversion to contract, a single consolidated contract for all of the DOL and DPW work will result. The Defense Financial Accounting System regionalization has not yet provided much benefit and has not reduced operating costs. However, it has provided us a more identifiable trail of the costs to account for the Army's financial transactions. The Civilian personnel regionalization has enabled the Army to reduce operating costs, improve efficiency through state of the art automation capabilities, and streamline processes and procedures for the civilian personnel function. Commanders and managers now have direct access to personnel and organizational data/information, which is updated on a real-time basis. The Army historically has provided civilian personnel services to several thousand employees of other agencies. A basic premise of Army civilian personnel regionalization is to avoid disputing existing servicing relationships. As a result, regionalization has not substantially affected inter-servicing within base support. The differing ways of managing these functions between services, impedes making additional progress. Regionalization has brought about sweeping changes for commanders, managers, employees and personnel managers in the areas of automation, operating procedures and servicing roles/relationships. In many cases, the speed and magnitude of changes have resulted in turbulence for personnel managers and serviced customers. The requirement to effect significant manpower reductions in the civilian personnel function during the transition period has added to the turbulence. We believe that the milestones established for regionalization were overly ambitious, given the scope and extent of changes at every level of Army and the Department of Defense.
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Admiral SCUDI. The Navy has embarked upon an aggressive Infrastructure Cost Reduction initiative to re-invent the naval shore establishment to free money for readiness and modernization. As a part of this effort, the Navy is identifying significant cost reduction opportunities through the consolidation or ''regionalization'' of installation management functions in our Navy concentration areas. Regionalization efforts will reduce base operating support (BOS) costs through the elimination of unnecessary management layers, duplicative overhead and redundant functions. Regionalization also facilitates better workforce utilization, development of most efficient organizations, opportunities to do competitive sourcing across an entire region, stanrdardization of processes and regional planning and prioritization. The Navy is currently involved in numerous interservice support agreements, some of which have evolved as a result of regionalization efforts. We will continue to explore opportunities to expand consolidation efforts across service lines as we implement our restructuring efforts. The Joint Staff is also evaluating cross-service regionalization opportunities, and is working with the Military Departments in conducting pilot studies in Hawaii and Hampton Roads.
General SAUNDERS. Since the Defense Management Review in 1991, the Air Force has realized savings of almost 8,000 manpower authorizations from regionalizing and consolidating across Service lines in the finance, personnel, printing, commissaries, and contract management functions. DOD continues to review functions that can be regionalized or consolidated.
General STEWART. The Marine Corps has regionalized: civilian personnel operating San Diego housing, Miramar base operations with the San Diego Navy Public Works Center, Okinawa housing through the Air Force and have consolidated the Federal Fire Department in Hawaii. Impediments include communication and control issues.
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Hardware/Software Capabilities
Mr. BATEMAN. Do your installations have the hardware and software capabilities to permit you to make effective use of electronic catalogues and shopping malls? Is this an effective way of doing business for you? General WHALEY. The mix of hardware and software at installations varies considerably and the capability to use electronic catalogues and shopping malls would be limited. These varying configurations make this an ineffective way of doing business at this time.
Admiral SCUDI. Use of electronic catalogues and shopping malls requires minimal investment in hardware and software to operate. The desktop hardware need only to be Internet capable and the software must be in a standard browser COTS package, usually Internet Explorer or Netscape. Many of the Service/Agency electronic catalogues and malls do require, however, the latest version of the standard browsers, e.g., I.E. 4.0. as most activities offer Internet access, the only variable in the access of E-Malls and E-Catalogs is the upgrading to the appropriate software browser version.
Use of the Internet to provide effective supply and contracting support is being enthusiastically explored by Navy. The various virtual ''stores'' offered by activities such as DLA's E-Mall enable Navy to quickly source and price competitive procurements of consumable items. Several issues must be addressed before the E-Mall concept will become integral to daily procurement actions. For example, integration between the E-Mall and the existing financial systems must be completed. Demand tracking is a critical metric that is lacking and information security issues must continue to be addressed. These issues are being resolved and Navy is confident that use of Electronic Catalogs and Shopping Malls will become an increasingly important part of our acquisition/contacting ''toolbox.''
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General SAUNDERS. Air Force base contracting offices currently have access to the Internet (hardware, software, browsers). We are also in the process of fielding computer equipment and LAN infrastructure to all contracting offices to ensure they can maximize the use of evolving technology. Through the Air Force Contracting Homepage, they can access GSA Advantage, the DLA E-Mall, the Air Force Electronic Country Store, and other electronic catalogs/malls.
We believe the increased use of purchase cards and use of electronic malls is a more effective way of doing business for many types of purchases. The Air Force is working closely with the DOD Joint Electronic Commerce Program Office to field significantly improved electronic mall/catalog capabilities.
General STEWARD. Our installations have a small (but rapidly-growing) capability, which began with the authorization to use the Navy's ''ITEC Direct'' to order IT resources. The DLA Electronic Mall should provide a much greater capability when fully operational at our sites.
Credit Cards
Mr. BATEMAN. To what extent are personnel at your installation using government credit cards for official purposes? Have you encountered any problems with these cards being used responsibly? To what extent do any problems that might exist weigh against the use of these cards?
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General WHALEY. In Fiscal Year 1997, the Army used the purchase cards for 89 percent of simplified acquisitions valued at and below the micro-purchase level. That equates to over 2 million purchases valued at over $1 billion. The vast majority of these purchases occurred at the user level since we have empowered Army civilians and military personnel to purchase their own commercial low-dollar needs. At the request of the Assistant Secretary of the Army (RDA), the Army Audit Agency completed a review of the program in December, 1995. The audit concluded that generally cards and purchases were adequately controlled and management controls were in place to minimize fraud and abuse. While some auditors found some occurrences of abuse most instances were already under investigation and uncovered by the controls already in place. The International Merchant Purchase Agreement Card (IMPAC) provides many of the efficiencies inherent in the use of a commercial credit card. In addition, controls have been placed in the IMPAC contract and implementing procedures to minimize the occurrences of fraud and abuse. The savings can be as much as $92.60 per transaction when the card is used in lieu of a purchase order. Those savings are far greater than any potential risk identified to date.
Admiral SCUDI. International Merchants Purchase Authorization Card (IMPAC) is used in over 90 percent of Navy's micropurchases, defined as small purchases $2500 or less. In addition, Navy's official travelers making more than one trip a year are issued an American Express credit card to be used for expenses (costs other than air and rail travel).
Instances in which the cards have been used illegally or fraudulently are not widespread. However, delinquencies delaying reimbursement to the credit card companies have been a problem which Navy has aggressively addressed through education of cardholders and streamlining certification procedures.
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Benefits derived from use of the cards (convenience for travelers and shoppers as well as reduction in procurement and accounting overhead) outweigh the delinquency problem. Navy is taking assertive steps to reduce delinquencies in both travel and micropurchase credit card transactions.
General SAUNDERS. The Air Force's use of the government credit cards for official purchases has increased every quarter since FY95. For the first quarter of FY98, 91% of eligible purchase were bought with the credit card. Our total FY98 goal of 90% is within reach and attainable. The Air Force Office of Special Investigations (AFOSI) reported a total of 22 case initiations from CY 1994 through CY 1997. Seventeen of the 22 case initiations involved theft of credit cards and 5 investigations were for unauthorized/improper purchases. The dollar loss was not high with only 2 investigations establishing a loss of over $5,000. The Air Force continues to place emphasis on vigilance by approving officials to keep fraudulent misuse at a minimum. We are not aware of any problems that might outweigh the use of credit cards.
General STEWART. The purchase card is being used for official purchases to the extent that our program has doubled in growth over the past three years. In 1995 we had 1,041 cardholders; 1996, 1598 cardholders; 1997, 2,575 cardholders; as of March 1998, 2,038 cardholders.
We have encountered relatively minor problems with the cards being used irresponsibly. Generally, this involves isolated incidents where cardholders have split requirements to avoid the $2,500 micropurhcase level. These types of problems typically surface during routine audit checks, or when approving officials certify invoices prior to payment. Also, Operation Mongoose provides checks and balances in the system that outweigh the problem described herein. If a violation is committed, the Activity Program Coordinator for the cardholder may restrict or discontinue use of the card.
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TRACKING SAVINGS
Mr. BATEMAN. Given the problems with DOD's accounting system and the departments limited success in tracking savings from prior reform initiatives, including BRAC, how will you really know what progress you are making in achieving savings?
General WHALEY. To insure visibility over the progress in achieving the savings, the Army Audit Agency is auditing all the efficiencies where savings were taken in the budget.
Admiral SCUDI. Budgets have already been adjusted to reflect the projected savings. Actual execution of the FY97 budget indicated very little migration of funding from other sources into the Base Operating Support accounts. Low migration rates into Base Operating Support accounts is an indicator of an adequate level of funding. The migration rates will continue to be closely monitored to determine if the reduced funding levels distributed for FY99 are adequate.
General SAUNDERS. By their very nature, estimates of savings are subject to some uncertainty. The Department reallocates expected savings through numerous decisions made as part of the normal process of planning, programming and budgeting. No audit trail, single document, or budget account exists for tracking the end use of each dollar saved through BRAC. The Department is committed to improving its estimates of costs and savings in future BRAC rounds.
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General STEWART. The Marine Corps is implementing Activity Based Costing at all of our installations to benchmark existing conditions and to measure effectiveness of cost saving initiatives. Currently the Marine Corps is working with the Navy in and around San Diego regarding regionalizing services in that area. We may work with the Navy in other areas as deemed appropriate from both a fiscal and operational point of view.
MILITARY PERSONNEL SAVINGS
Mr. BATEMAN. To achieve the QDR's personnel reduction targets, the Army will compete functions currently performed by military personnel. However, the Army does not plan to reduce its endstrength, resulting in a duplication of costs: military personnel pay plus the cost of either the federal or private sector workers. Where are the savings from this approach? Doesn't this approach put added pressure on the installation's O&M accounts?
General WHALEY. As a result of the QDR, Army's military end strength is being reduced from 495K to 480K by FY99. Competitive sourcing studies will help produce some of these reductions. However, the institutional Army has very few functions solely performed by military personnel. Most of the military personnel working in commercial activities within the institutional Army are in positions because of reason related to military essentiality, such as career progression, military rotation and military unique knowledge and skills.
SELECTION POSITIONS FOR COMPETITIVE SOURCING
Mr. BATEMAN. Based on recent GAO study, the Army has decided to select positions annually to meet its outsourcing requirements under the QDR. If you haven't identified your study candidates for the out year, how can you be sure the studies will occur on a timely basis and savings will be realized?
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General WHALEY. The Army leadership has provided guidance to our major commanders on how many positions to compete, by fiscal year, through fiscal year 2001. The Army has tradition of empowering its commanders. During the last several years, as we have emphasized the savings that competitive sourcing can produce, we have allowed our commanders to make the decision on which commercial activities and positions to study. They are in the best position to know what makes sense to compete and when. Our commanders are working right now on identifying study candidates for FY99. We believe we will achieve the projected savings because those projections are more conservative than the average savings achieved by the Army and by the Department of Defense in the past. Specifically, we have programmed 20 percent savings compared to the Army historical average of 28 percent savings. If MACOM's don't achieve the reductions through competitive sourcing, they must achieve the savings through other personnel management tools.
Mr. BATEMAN. The Navy's portion of the 150,000 personnel reduction mandated by the QDR will come primarily from force structure reductions. In fact, almost 60% of the Navy's reductions will come from the ACTIVE forces. What impact will this have on the currently high OPTEMPO rate in the Navy? Please provide examples of what positions the Navy plans on reducing that will not affect OPTEMPO or readiness?
Admiral SCUDI. The Quadrennial Defense Review (QDR) validated the Navy's force structure requirements. Navy's core combat capability will reside in twelve aircraft Carrier Battle Groups (CVBGs) and twelve Amphibious Ready Groups (ARGs). As a result, the Navy's combat force structure will not dramatically change in the near future. With the insertion of innovative technologies, the Navy's new ships and aircraft will be more advanced and require less people to operate and maintain. Although these new platforms will require units to be manned with a higher ratio of Sailors with specialized skills, the overall unit size will be smaller. The lower manning levels will not affect OPTEMPO or compromise readiness as the Navy's combat force structure will remain centered around the twelve aircraft Carrier Battle Groups (CVBGs) and twelve Amphibious Ready Groups (ARGs).
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The majority of personnel reductions are tied directly to the ship and submarine decommissionings required to meet QDR force structure levels and the transfer of selected Combat Logistic Force ships to the Military Sealift Command. Additionally, competitive initiatives including competition and outsourcing, regionalization, and civilian substitution have generated other end strength reductions.
Mr. BATEMAN. The Navy has several infrastructure reduction initiatives underway from regionalization to Information Technology for the 21st Century (IT–21). What is the cost of such programs and when are savings estimated to appear? How is the Navy integrating the planning and execution of these programs?
Admiral SCUDI. The Navy's Competitive Sourcing Program costs $141.5 million through the Five Year Defense Plan (FYDP), FY98–FY03. This money has been set aside for major commands and installations to conduct commercial activities studies utilizing the OMB Circular A–76 process. This investment is set up to provide technical supports for implementation at the commands through the use of professional consultants. The Navy's FYDP reflects approximately $2.5B in net savings through FY 2003, with approximately $1.2B of annual savings in FY2003, that have been reapplied within our budget request toward recapitalization and modernization of our force structure.
Regionalization analyses are on going in most Navy concentration areas. As we implement the resulting recommendations, we anticipate that some local investment will be required to upgrade information technology capabilities and to provide management support during the implementation process. While we have not yet quantified this cost across the entire Navy, we estimate that it will be approximately a few million dollars per region. This local area one-time investment will be in part met by the Navy's on-going IT–21 efforts, and will be more then offset by the significant cost reductions being identified. Thus far, our Analyses estimate the following annual savings for regionalization: Hampton Roads—$83M, San Diego—$40M, Pearl Harbor—$18M, and Pensacola—$15M. Across the Navy these efforts should produce savings of over $200M per year. Cost reductions will be achieved on a phased basis as new regional organizational structures are implemented. San Diego implementation will be completed by the end of FY 1999. Implementation in Hampton Roads, Pensacola and Pearl Harbor will be completed by the end of FY2000, with other Navy concentration areas scheduled to complete implementation during FY2001–2003.
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With regard to our IT–21 initiatives in general, the following table depicts the PRESBUD fiscal year 1999 investment builds across the FYDP. IT–21 initiatives are still in the development/maturation process, and further funding requirements will be review as part of the POM–00 process. It is still to early to estimate with any accuracy when and how savings might appear.
Mr. BATEMAN. According to a recent GAO report, in order to meet the QDR personnel reduction requirements, the Air Force intends to contract out 22,000 military and 16,000 civilian positions primarily at four bases. At what four bases will these reductions occur? Will the civilian workforce be allowed to participate in the competition? On what basis did you select and prioritize the locations and functions that have been identified for A–76 competitions?
General SAUNDERS. The FY 99 PB reflected a reduction of about 22,000 military and 16,000 civilians. This reduction was tied to an Air Force initiative which identified positions that could be competed with the private sector, a separate outsourcing study of targeted functions at four bases which have not been announced, and other projected competitions through the A–76 process. These competitions will occur at most Air Force locations in the CONUS and selected overseas locations. The civilian workforce will participate in the competition process through the development of the most efficient organization. In coordination with the major commands, the Air Force reviewed the total workforce to determine if a function was a commercial activity that could be competed with the private sector. We then removed from consideration any position, civilian or military, that was considered wartime deployable, forward based, military essential or inherently governmental. We also removed from consideration positions to account for rotation base to support overseas and career field sustainment. The remaining positions fell into the Office of Management Budget category of commercial activity, which is the category of positions the Air Force considers for competition, and all were considered for A–76 competitions.
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DIVESTITURE
Mr. BATEMAN. Over 1,700 Air Force positions with the 38th Engineering and Installation Wing are scheduled for divestiture in 2000. In other words 1,700 federal positions will be eliminated and the Air Force will buy service from the private sector. Please explain why Congress was not notified of this action as under Title 10?
General SAUNDERS. Congress has been notified of the intent of reengineer the 38th EIW between now and the end of 2000. The 38th EIW is a military unit that performs numerous functions at several locations throughout the country. The Wing will continue to perform those functions after it is reengineered, although the reeinginerring will result in a reallocation of workload between the public and private sector. If in the future the reengineering triggers any further reporting requirements, the Air Force will provide appropriate notification.
Mr. BATEMAN. The Marine Corps plans on reaching its designated QDR personnel reductions by reducing the Marine Corps' Security Battalion, which provides security to the Navy's installations and special weapons. Has the security requirement for this function changed recently? How will this reduction affect the Marine Corps ability to cover this mission?
General STEWART. The Marine Corps intends to meet most, but not all, of the QDR mandated active duty personnel reductions by reducing the manning of the Marine Corps Security Force (MCSF) Battalion. The impact of these reductions has been minimized because they incorporate closures that had been planned before the QDR (e.g., MCSF Co Pearl Harbor, HI, MCSF Co North Island, CA, Marine Barracks Japan and others).
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Working together, the Navy and Marine Corps have examined the requirements for Marine support for Navy installations and ships and have decided to continue to use Navy security forces where the unique abilities of Marines are not needed. Marines will continue to provide security for Navy special weapons storage sites and other vital assets. We will continue to study security requirements to ensure the proper forces, to include technology, are employed.
We have also established a second Fleet Anti-Terrorism Security Team (FAST) Company. The mission of FAST is to rapidly augment security of Naval installations or ships when warranted by indications and warnings of terrorist actions. As part of this initiative for improving Naval security, a FAST platoon will be forward deployed to support the Navy commanders in Europe, Southwest Asia and the Pacific. These three FAST platoons will be employed based on the security requirements of the Navy commanders in theater. Likely missions include security reinforcement of installations and ships in port.
The establishment of the 2nd FAST Company and the forward deployment of FAST platoons has dramatically increased the flexibility and responsiveness of Marine security forces in order to counter today's asymmetric threats and to enhance the level of security in the Navy.
FY 1999 SHORTFALLS IN RPM AND BASE OPERATIONS SUPPORT
Mr BATEMAN. For the record, does your FY 1999 Budget Submission reflect any shortfall in funding for Real Property Maintenance and Base Operations Support? Quantify what the recognizable shortfalls in those areas are?
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General WHALEY. In order to balance all readiness accounts in FY 1999, Real Property Maintenance (RPM) is funded at only 58% of requirements, leaving an unfinanced requirement of $463,500,000. Additional funding of $463,500,000 would improve the FY 1999 RPM posture to the 78% level. At this 78% level, we would slow the deterioration of Army facilities. If the RPM continues to be severely underfunded, the Army will continue to operate at the emergency repair level. Deferring maintenance and repair work will result in the continued decay of facility infrastructure, requiring major investments for replacements and potentially increased mission failure.
Base Operations Support programs include: Base Operations, Family Programs, Base Communications, Audio-Visual, and Environmental. Base Operations Support is funded at 85% of requirements in FY 1999, leaving an unfinanced requirement of $500,000,000. Additional funding of $500,000,000 would improve the FY 1999 Base Operations Support posture to the 89% level and would enhance the quality of life for the soldier and their families.
General SAUNDERS. The Air Force O&M budget maintains a delicate balance between readiness and modernization. Given fiscal efficiencies and constraints in our topline, we achieve this balance by making tradeoffs, and challenging our wing commanders to achieve a number of efficiencies and operate within certain funding constraints. The assumed efficiencies and savings will challenge the resourcefulness of our wing commanders, but are based on past accomplishments, and are challenges we fully expect to meet. The 1999 budget continues to fund real property maintenance at the Preventive Maintenance Level which only provides resources to accomplish the periodic maintenance required to sustain day-to-day real property facilities and infrastructure. This funding level limits efforts for maintenance and defers critical repair requirements, including dormitory renovations. Base Operating Support is funded at 76 percent of FY 1996 actual expenditures challenging us to achieve identified competitive sourcing initiatives. If additional funding were made available, the Air Force could execute $160M in quality-of-life projects in FY 1999, which includes $91M in dormitory repair and minor construction projects and another $247M in Base Operating Support for combat service support.
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Mr. BATEMAN. The 1999 budget request provides approximately 70% of the funding necessary to arrest the growth in the Navy's critical backlog of maintenance and repair. This percentage improves over the FYDP. With the funding provided in the 1999 budget request, the Navy's critical backlog of maintenance and repair for O&M funded facilities is expected to grow from a projected $2.7 billion at the start of fiscal year 1999 to $3.1 billion by the end of fiscal year 1999.
Admiral SCUDI. The Navy's current approach emphasizes mission critical facilities such as piers and runways, and a strong commitment to improved quality of life through continued emphasis on bachelor quarters. At the same time, we are aggressively pursuing efforts to create a minimal and efficient infrastructure through regionalization, consolidation, privatization and demolition. We feel that this approach will ultimately arrest the growth in backlog and improve the recapitalization of critical facilities.
Mr. BATEMAN. Well, thank you all. I would like to hear from each of you, if you are able to do this today, and if not, for the record, as to whether or not your 1999 budget submission reflects any shortfall in funding for real property maintenance and base operations. I suspect that they do. I guess it is one of the things that is inevitable as budgets decline and you have to make balancing judgments. But it would be useful to the committee at least to be able to quantify what the recognizable shortfalls in those areas are.
General STEWART. Within the topline available to the Marine Corps, we have made very difficult decisions in striking a balance between readiness, quality of life, and force modernization. For some time now, financing our top priority, near-term readiness, has come at the expense of future modernization for our ground and aviation units, quality of life programs, and investment in the infrastructure at our bases and stations. The Commandant is concerned about the maintenance of our bases and stations and about the continued underfunding of our military construction and family housing accounts. Funding in each of these areas remains austere, and under existing topline constraints, does no more than minimize the deterioration of our facilities. In spite of efforts to contain it, our backlog of maintenance and repair of real property grows by approximately $60 million each year and exceeds $1 billion by FY 2003, far exceeding the Marine Corps goal of $100 million by FY 2010. An additional $72 million in FY 1999 would allow us to arrest this backlog.
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In the area of base operations, we could use an additional $10.4 million in FY 1999 for base communications ($2.7 million), food preparation and serving equipment ($3.5 million), fire fighting equipment and training ($2.5 million) and vehicle operations and maintenance ($1.7 million).
While additional funding in these areas would be most helpful, I must point out that the Marine Corps has worked hard to intricately balance our request within the constraints of the President's Budget, and unless funds are available in addition to the present topline, we feel there is no better allocation of funds within Marine Corps accounts than that reflected in our budget request.
Mr. BATEMAN. Reference has been made to, I think in the instance of General Whaley, of 50 million square feet of space being eliminated. This not through base closure, I assume.* * * you are just tearing down things, getting rid of things that are not necessary which you therefore don't have to maintain any longer? * * * What is the experience of the other services?
Admiral SCUDI. The Navy established a centralized demolition program in 1996 with the goal of eliminating aging, unneeded facilities and their associated operating and maintenance costs. An August 1997 survey of Navy activities identified 1,600 excess buildings totaling 10 million square feet which are candidates for the Navy's centralized demolition program.
The centralized demolition program is adequately funded to meet current requirements. The 1999 budget request of $33 million represents a reasonable balance with all other Navy funding needs.
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General SAUNDERS. From the Air Force perspective, I take the specific numbers for the record.
General SAUNDERS. The Air Force decided to centrally manage the Air Force demolition program in fiscal year 1996. Between fiscal year 1996 and fiscal year 1998 the Air Force will have demolished approximately 8,000,000 square feet. With the funds currently programmed, a total of approximately 22,000,000 square feet will be eliminated by 2003.
Mr. BATEMAN. Can you quantify what is in the budget submission for the Navy and the Air Force in terms of projected savings that are supposed to help make the budget fall in place.
Mr. WARREN. During the hearing March 13, 1998 you asked that we provide you with the preliminary information we have regarding DOD's projected savings from A–76 competitions.
DOD projects that, starting in fiscal year 1999, it can save about $6 billion over the next 5 years and $2.5 billion each year thereafter by subjecting more of its business and support activities to competition using the A–76 process.(see footnote 2) We have ongoing work that is attempting to specifically identify and confirm with OSD the A–76 competition savings goals in the 1999 Future Year's Defense Plan. Therefore the information presented in the table below for the individual military services is preliminary data obtained from DOD and is subject to change. Further, OSD has not been able to provide us information on the A–76 competition plans of the Defense Agencies. OSD stated that the defense agencies' plans are preliminary at this time.
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QUESTIONS SUBMITTED BY MR. ORTIZ AND MR. EVANS
LOGISTICS MANAGEMENT INSTITUTE (LMI)
Mr. ORTIZ. What is your salary as president of LMI; what are the salaries of your Vice President? What overhead and administrative fees do you charge to DOD to conduct your studies? Don't you feel a conflict of interest when you're chairing DSB logistical studies that eventually spin off into LMI projects?
Mr. TUTTLE. The DOD General Counsel's office always briefs all DSB members on the subject of conflict of interest, real or potential. I have not yet encountered a conflict of interest between my work for the DSB and my job as President of LMI. Moreover, I believe it important to note that LMI's DOD sponsors determine the scope and specific focus of LMI's research tasks, not the DSB. I must also add that logistics studies for DOD are ''core work'' for LMI's Federally Funded Research and Development Center (FFRDC) and therefore are subject to an allocated ceiling. As a result of ceiling constraints, we routinely turn away about 25 percent of the research work our FFRDC is asked to do by DOD.
Mr. ORTIZ. I understand that LMI's budget has been increasing for the last few years. What is your expected budget for FY98? Why do you think your budget has continued to increase, when DOD is cutting funding in other areas?
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Mr. TUTTLE. First, it is important to note that LMI is not allocated ''line item funding'' by Congress or DOD. As a nonprofit corporation, LMI secures individual contractual studies and analyses task work from DOD and other government agencies.
LMI's total research program revenues have increased over the past few years because we have expanded our research and analyses program for non-DOD clients. Our projected FY98 research program totals $51 million, $22 million of which is associated with non-DOD work. the vast majority of this non-DOD work is for federal civil agencies.
Mr. ORTIZ. LMI has over 150 active military personnel assigned to it to conduct its studies. If I understand the arrangement DOD assigns active duty personnel to LMI to conduct studies of DOD logistics operations and then pays LMI to conduct those studies? Why doesn't DOD do its own studies, using its own personnel and eliminate paying LMI a fee to manage these studies? In other words, what value added does LMI contribute to these studies?
Mr. TUTTLE. The information you have been provided is incorrect. We typically have one military officer assigned for a one-year tour as a research fellow. This is done under the auspices of the Department's Training with Industry Program.
Mr. ORTIZ. I understand you believe in alternative logistics support concepts to save the Department funds. What are these concepts?
Mr. TUTTLE. I believe that we as a Nation need to rethink how we support the warfighter from the CONUS commercial industrial base to our soldiers, sailors, airmen, and marines in the battlespace. In that regard, rather than relying on its organic capabilities, which I submit requires a considerable investment to maintain and modernize, I think DOD should place greater reliance on the private sector for weapons system support and use more commercial products where it makes good sense from an economic as well as a military effectiveness standpoint. Stated somewhat differently, my underlying philosophy is not to use the private sector at all costs, but rather to do so when DOD can clearly benefit from such arrangements in terms of quality, improved responsiveness, reduced costs, acceptable risk, and a healthy industrial base.
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I also believe that DOD's business processes need to be streamlined—reengineered in today's vernacular—to reduce nodes and layers or ''middlemen'' that contribute little in terms of value added but cost a lot in terms of time and resources (money and people). This streamlining, or reengineering, coupled with an aggressive program to eliminate excess infrastructure, is essential to meeting future defense needs given current fiscal realities and the need to protect readiness and fund critical force modernization requirements.
Mr. ORTIZ. Did you propose these concepts within the Army or elsewhere while you were Commander of the Army Materiel Command? If not, why not?
Mr. TUTTLE. Yes, I did.
Mr. ORTIZ. Do you believe the country can dismantle its organic infrastructure within an acceptable range of risk? Why and to what degree are you recommending dismantling?
Mr. TUTTLE. Although considerable progress has been made in eliminating excess infrastructure, DOD's organic infrastructure is by all accounts still far too large. Moreover, a substantial amount of what remains in terms of logistics infrastructure is woefully outdated in comparison to commercial sector practices and capabilities.
Because of the foregoing and the need to free resources for higher priority needs like readiness and force modernization, I believe there is a need to re-institute the Base Realignment and Closure (BRAC) Commission. This Commission, in my opinion, served the Nation exceptionally well. Rather than resulting in the wholesale dismantling of our defense infrastructure, it enabled DOD to prudently downsize its infrastructure and reduce infrastructure support costs after considering future defense needs and strategic risk. Equally important, it also forced DOD to consider and provide assistance to the communities and workers affected by the BRAC process.
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Mr. ORTIZ. If you accept that a dedicated infrastructure for logistics is required (whether organic or contract) what is the difference if it must be kept in operation? Cost/efficiency? (where are the studies that prove contractors are better?)
Mr. TUTTLE. Cost and efficiency considerations are important, but the primary focus in my view must be on improving responsiveness to the warfighters' needs in both peace and war. Moreover, although I believe that commercial sources can provide more responsive support to our operational forces at less cost, and that we ought to place greater reliance on them and downsize DOD's organic infrastructure, I believe also that defense officials ought to assess each product or service to determine whether contractor support is appropriate. Finally, I also think it's important to note that in the burgeoning information age, most cutting-edge advances in the information processing arena are coming from the commercial sector, as opposed to the DOD infrastructure.
Mr. ORTIZ. What happens to the government's core skill base if contractors are periodically utilized?
Mr. TUTTLE. I define the government's ''core skill base'' as being inherently governmental in nature, something that only a government employee (military or civilian) can perform. In this sense I would not expect contractors to do such work.
Mr. ORTIZ. We understand you support contract logistics support for Defense Weapons Systems. How far down does that extend: Army maintenance battalions, Air Force support squadrons, contractors operating support ships?
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Mr. TUTTLE. I support contract logistics support for weapons systems where it make sense and is advantageous to the government and the warfighter. In those situations, that essentially means it must provide the required responsiveness at a reasonable cost in peacetime and fully support projected crisis-response and wartime support requirements.
In my view, how far down contractor logistic support should be extended is situation dependent. In general, though, I do not think we should attempt to extend such support down to the battlespace level (e.g., Army maintenance units and Air Force maintenance squadrons), given the dramatically more dynamic and lethal 21st century battlespace environment that the Chairman of the Joint Chiefs of Staff describes in Joint Vision 2010.
Mr. ORTIZ. What documented evidence can you point to that private industry can do things ''faster, cheaper, better and smarter'' ?
Mr. TUTTLE. The evidence, as you might suspect, is mixed and clearly suggests the need to judge each case on its own merits. For example:
The Department's experience with contractor logistics support suggests that such support has been and continues to be in the government's best interests, all things considered, in several notable instances (e.g., the KC–10 and C–9 aircraft and the Mobile Subscriber Equipment).
The Defense Reform Initiative Report points out that government organizations and private-sector enterprises each won about half of the A–76 process competitions conducted between 1979 and 1994.
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Data collected by Herbert M. Davis and Company presented at the Council of Logistics Management Annual Meeting, 5–8 October 1997, shows that the private sector typically satisfies a customer demand for a stocked item in about 8 days, which is considerably better than DOD's performance of 20 to 25 days.
LMI's research also shows that DOD's depot level repair cycle times range from 56 to 130 days, considerably higher than private-sector experience which varied between 5 and 21 days depending upon the industry involved and the complexity of the repairs performed.
Mr. ORTIZ. If there is a large scale contracting of the support structure, how will the rotation base be affected?
Mr. TUTTLE. DOD's support structure is predominantly manned by civilian employees for whom there is no rotation based requirement. I don't know if large-scale contracting would create a significant rotation base problem for the military positions that exist in the support structure today. Typically, rotation base requirements are considered before addressing whether to outsource a function or activity.
Mr. ORTIZ. In a speech at the Army War College on Jan. 14th, mentioned that the DSB is going to undertake a major new summer study on logistics support reengineering. He said the focus of this effort will be on implementation of your earlier proposals. What can you tell us about this study and any other studies you are, or plan to, work on for the DSB?
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Mr. TUTTLE. I have been asked and plan to participate in the DSB Summer Study mentioned by Dr. Gansler. The DSB panel is being formed and since we have not yet had any meetings, I really cannot provide any useful insights on the effort at this time.
In addition to this study effort, I have recently completed chairing a DSB Task Force that addressed the acquisition work force and am working on DSB panels that are addressing acquisition reform and the management and disposal of surplus military property.
Mr. ORTIZ. You chaired the DSB's Task Force Report on Logistics Modernization and a number of questions have come up concerning the estimates that came out of that study. Since Dr. Gansler and others keep using those estimates to justify a full-speed-ahead approach to radically restructuring our logistics infrastructure it would be helpful to understand some of the underlying assumptions you used in the study:
First, to achieve $30 billion in savings by the year 2002, the Department would need to spend $6 billion in investments. What are the $6 billion in investments that are needed, and where would the funds come from?
Mr. TUTTLE. Let me begin by correcting some misperceptions. The DSB's Task Force on Logistics Modernization, which I chaired, did not come up with the savings estimates you cite. Those estimates were developed by the DSB 1996 Summer Study, which Dr. Jacques Gansler co-chaired with Mr. Gordon England. I participated in that study effort and had the lead responsibility for assessing and developing recommendations in the logistics area.
In the logistics infrastructure area, we estimated slightly more than $4 billion in investments would be required to achieve potential downstream savings and cost avoidances of about $6 billion per year by 2002. That included one-time investments of $3.4 billion over six years ($25,000 per person or about $0.6 billion per year) for personnel outplacement and about $0.1 billion of management information system improvements for contractor logistics support and prime vendor metrics. In addition, we estimated that about $0.3 to $0.5 billion in reliability improvements would be required each year to sustain continued savings.
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The source of these funds was not identified in the study. The funds could be made available by reallocating resources within the Department's projected fiscal topline, increasing the topline, or a combination of the two.
Mr. ORTIZ. What major assumptions were used to arrive at your $30 billion in savings, and how valid do you think they are in today's environment, after the critical analysis of your study?
Mr. TUTTLE. I can only speak to the potential $6 billion in savings that I developed for the logistics portion of the overall study. The methodology we employed to develop that estimate used macro factors and assumptions. It was designed to highlight the potential savings that could be realized in the ''logistics'' area if one took certain actions, such as increasing the use of outsourcing, eliminating middlemen, and streamlining existing business processes. In that regard, although we have since identified a $1 billion calculation error we made in developing our panel's estimate, I continue to believe that our approach and revised estimates highlight the bounds of what is possible and serve an important purpose.
Mr. ORTIZ. Both the Office of Program Analysis and Evaluation and the GAO attempted to review the potential $30 billion in savings and couldn't understand how you arrived at that number; perhaps you can enlighten us on how these projections were determined?
Mr. TUTTLE. The individuals I spoke to understood the basic methodology we employed, because they too have used much the same approach in their own studies and projections.
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Their disagreement with the savings estimate in my view largely stemmed from their belief that some of the actions we proposed (e.g., eliminating excess CONUS infrastructure and reducing DOD logistics personnel) could not be implemented because of Congressional resistance. As I told them then, and restate here again, the DSB Task Force's purpose was to show what it thought was within the realm of the possible, assuming that Congress and the Administration could come to agreement on certain highly sensitive issues such as reinvigorating the Base Realignment and Closure (BRAC) process and streamlining traditional support practices. I should also note the GAO report on the DSB effort states that the cost base we used to develop our estimates was ''conservative.''
Mr. ORTIZ. Mr. Warren from GAO testified that the DSB's outsourcing savings assumptions are overly optimistic, mainly because competitive markets do not exist for the type of work being proposed for outsourcing, like depot maintenance, while the DSB based its estimates on areas that were highly competitive like food service and base operations. How do you respond to GAO's analysis of the DSB estimates?
Mr. TUTTLE. Our estimates were developed using macro-factors and techniques, a commonly used analytical approach to gain some insights on the limits of what might be possible in a broad sense. I fully agree with the need to address the areas identified in more detail as Mr. Warren suggests.
Mr. ORTIZ. The following additional questions pertain to the DSB study on logistics as authored by General Tuttle:
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Were any LMI resources used to produce this study?
Mr. TUTTLE. Yes, LMI personnel presented selected briefings on the results of our studies to participants in the DSB 1996 Summer Study. The costs associated with those efforts were borne by LMI.
Mr. ORTIZ. Has LMI been asked to study any of the issues or recommendations contained in the study, and if so, what issues and by whom; specify by project number, sponsor and cost.
Mr. TUTTLE. No, LMI has not been asked to study any of the issues or recommendations contained in the study.
Mr. ORTIZ. What is your detailed response to the criticisms of PA&E and the GAO concerning the studies recommendations and cost savings estimates?
Mr. TUTTLE. As I noted in response to another question, their disagreement with the studies recommendations and cost savings estimates in my view largely stemmed from their belief that Congress would not support some of the actions we proposed (e.g., eliminating excess CONUS infrastructure and reducing DOD logistics personnel). The studies recommendations and cost savings estimates were intended to show what was within the realm of the possible, assuming that Congress and the Administration could come to agreement on certain highly sensitive issues such as eliminating excess infrastructure via additional BRAC rounds and streamlining traditional support practices. With regard to the latter, the GAO report on the DSB effort notes that the cost base we used to develop our estimates was ''conservative.'' The discussions also highlighted the existence of a $1 billion calculation error we made in developing our cost savings estimate.
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Mr. ORTIZ. What recommendation do you still consider valid after considering the PA&E and GAO criticisms, and what projected savings do you now envision for each of the remaining initiatives?
Mr. TUTTLE. I still consider the broad thrust of my panel's recommendations in the logistics area to be valid. Because we have not updated our projections since completing the study, I am not in a position to provide revised projected savings estimates other than to note that our overall savings estimate was overstated by about $1 billion because of a calculation error. The estimate was probably understated to some degree given GAO's view that the cost base we used was conservative.
Mr. ORTIZ. Do you feel a conflict of interest when you're chairing DSB logistical studies that eventually spin off into LMI projects.
Mr. TUTTLE. The DOD General Counsel's office always briefs all DSB members on the subject of conflict of interest, real or potential. I have not yet encountered a conflict of interest between my work for the DSB and my job as President of LMI. Moreover, I believe it important to note that LMI's DOD sponsors determine the scope and specific focus of LMI's research tasks, not the DSB. I must also add that logistics studies for DOD are ''core work'' for LMI's Federally Funded Research and Development Center (FFRDC) and therefore are subject to an allocated ceiling. As a result of ceiling constraints, we routinely turn away about 25 percent of the research work our FFRDC is asked to do by DOD.
Mr. ORTIZ. How can you contain costs for Defense Logistics Support initiatives when alternative private investment opportunities present better rates of return?
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Mr. TUTTLE. I do not understand your question.
Mr. ORTIZ. You mentioned the mobile subscriber equipment in your testimony as an example of a good contractor supported system. How far down in the logistical chain do you recommend contractor support? If contractors maintaining this system had died in the Gulf War are current laws adequate to cover this situation?
Mr. TUTTLE. In my opinion, the appropriate level to which contractor logistics support can be reasonably extended is situation dependent. Further, I believe the arrangement made for mobile subscriber equipment contractor support during the Gulf War (i.e., a repair center in a rear area) is a useful model. I also believe that our current laws are adequate to cover the situation you describe.
Mr. ORTIZ. Going to a private-sector contractor maintained logistical support system presents a host of questions concerning their status on the battlefield. What are your major concerns about their presence in combat areas and what laws need to be changed to account for their new status? For example, do they warrant combat pay; are they considered combatant; what benefits are they entitled to for hazardous duty; etc?
Mr. TUTTLE. My greatest concern regarding using contractors in a crisis response or wartime operation is to provide for their personal safety. I believe that existing laws are adequate and that contractors should be provided additional compensation for supporting our forces in a hazardous situation.
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Mr. ORTIZ. Gen. Tuttle, if you were a soldier today, would you want to go to war with the logistical support structure you have recommended?
Mr. TUTTLE. Yes. I would have no qualms whatsoever about the ability of logistical support structure I have recommended to meet my needs during a war.
Mr. ORTIZ. Any idea how much money we are talking about?
Admiral SCUDI. The Navy has programmed $161.5M of Operations and Maintenance funding in fiscal year 1998 through fiscal year 2003 to provide consultant support for competitive sourcing studies under Office of Management and Budget (OMB) Circular A–76. The yearly investment breakdown is as follows: FY98 $45 million; FY99 $38.3 million; FY00 $39.5 million; FY01 $39.8 million; FY02 $21.2 million; and FY03 $1 million. These funds are viewed as investment money to achieve savings through introducing competition into the Navy's business process. This investment funding will be returned to the Navy in the form of reduced Operations and Maintenance infrastructure requirements. The Navy anticipates on saving $2.5 billion in FY00–FY03 from the Competitive Sourcing program. Yearly anticipated savings are as follows: FY00 $93 million; FY01 $440 million; FY02 $829 million; and FY03 $1.171 billion.
General SAUNDERS. Currently we perform studies using our in-house workforce at MAJCOM and Base level. As requirements increase, we will adjust those resources accordingly.
Mr ORTIZ. I have another question for you, General Saunders. Maybe you could explain the Air Force position on COCESS, the Contract for Operated Civil Engineering Supplies Stores. It appears the bundling of COCESS to a larger base operating service contracts reflects a policy decision by the Air Force that is anticompetitve. Can you enlighten me on that?
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General SAUNDERS. The Air Force is dedicated to determining the most cost efficient method of operating all its commercial activities including COCESS stores. The Air Force position is not to bundle COCESS into larger base operating service contracts until a thorough analysis is conducted, including an economic analysis, assessing the merits of combining these services to increase efficiencies at Air Force installations. This integration with other base support functions will only occur in situations where it makes good business sense and provides the most cost effective organization. The Air Force remains committed to ensuring that small businesses receive a fair proportion of Air Force contracts.
QUESTIONS SUBMITTED BY MR. COMBEST
PILOT TRAINING
Mr. COMBEST. What is the current capacity for pilot training at Columbus, Laughlin, and Vance AFBs? Is this capacity sufficient to meet the pilot requirement for the next 5 years?
General SAUNDERS. Current Student Training Capacity per year:
Currently no, however, the Air Force is actively working initiatives that will meet and exceed the necessary training capacity. Examples of these initiatives are: moving bomber training from T–38s to T–1s, and relocating Introduction to Fighter Fundamentals (IFF) training.
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Pilot Retention
Mr. COMBEST. What are the Air Force's current projections for pilot retention in the next five years? How have previous Air Force projections of pilot retention compared to the actual rates in the previous five years? These figures should include Air National guard, Air Force Reserve, Foreign Nationals, instructor pilot training and other miscellaneous pilot training requirements.
General SAUNDERS. The Air Force measures active duty (ANG, AFRC and Foreign Nationals not tracked) pilot retention using 6–11 cumulative continuation rates (CCR). A 6–11 CCR is defined as the percentage of officers entering the 6th year of service who complete the 11th year of service, given existing retention rates. Below are the actual vs. projected retention rates for 1993–1997 and the future projections for 1998–2003:
Airline Hiring
Mr. COMBEST. What are the Air Force's current projections for airline hiring? How do past estimates compare to actual figures 1996 and 1997 to date?
General SAUNDERS. An FAA Blue Ribbon Panel estimated 1996 airline hiring (for 14 major airlines) would be 2123 pilots. The actual 1996 hiring was 2551. In 1997, the Air Force relied on statistics provided by AIR, Inc (Aviation Information Resources), a private company specializing in pilot resource information. AIR, Inc estimated 4200 hires in 1997. The actual hires were 3854. Below are the future projections.
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Bonuses
Mr. COMBEST. Please provide data on the number of pilots accepting bonuses and compare that with planning estimates for the previous three years.
General SAUNDERS. Historical aviator continuation pay (ACP) take-rates follow:
ARC Pilot Training Requirements
Mr. COMBEST. What are the Air Force predictions/assumptions for pilot training requirements for the Air Reserve Component (ARC) for the next five years? Please compare this to actual figures for 1996 and 1997 to date. What are the Air Force current projections for pilot training requirements for (ARC) for the next five years?
General SAUNDERS. The Air Force Reserve is increasing the number of trainees entering pilot training. This increase of 10 per year will begin in FY99 and continue until FY01 when the number of trainees levels out through FY03. This action is our effort to build the Reserve flying force so that the lower numbers of active duty pilots we are able to access in these same years will not affect us dramatically. The historical factors driving this build are discussed below and are shown with accompanying predictions/assumptions for the next five years, current projections for pilot training over the same five year period, followed by a comparison of actual figures for FY96 and FY97.
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Air Force Undergraduate Pilot Training production was driven to an all time low during FY94–97 by mandatory reductions in force size and end strength requirements. The low production produced a ''bathtub'' of small year groups of pilots who will come to the end of their Active Duty Service Commitment (ADSC) in FY03. This results in a smaller pool of potential pilots who can be assessed into the Air Force Reserve.
Currently, 2,577 pilots are authorized in the Air Force Reserve. Loss projections vary by year, but range from approximately 270 to a spike of 388 in FY00 for Traditional Reservists as the final Vietnam veterans begin their exodus. Loss projections are flat-lined at 15% for purposes of projection only, but we believe these losses will climb each year throughout the FYDP. The above figures purport a ''best case'' scenario. Gain projections are based on predictions of 25% per year accessed eligible active duty officers.
Even with its current build in the number of first-time trainees entering pilot training, the Air Force Reserve will begin a drop in pilot manning at the rate of 1% per year. From FY98 to FY02, this equates to a drop from 98.7 to 94.7%. No relief from this trend is evident using predictions/assumptions described below (a ''best case'' scenario across all accession areas), which we hope will remain constant over the next five years.
Assumes the current increase in pilot training positions remains unchanged: (Current projections) (numbers are AFR pilot training positions allocated by AF as part of the Total Force requirement):
That the AFR receives 25% of active duty pilots who leave the AF, every year, and that attrition drops no lower than historical averages, i.e., predicted mandatory separations, and unprogrammed losses are limited to 288 pilots per year.
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If the newly formed Air Force Reserve AETC Instructor Pilot Program is added into the overall pilot requirement for the command, the number of pilots required increases dramatically. The latest data including that program shows the Air Force Reserve will only be able to fill approximately 82% of their allocated positions from FY03 and out, all other assumptions remaining stable.
The most recent Reserve pilot training figures for FY96 and FY97 were:
Executing the program as stated kept the Air Force Reserve at the 98.7% level. The UPT program was bolstered by an active duty hire rate ranging from 8–13% of the eligibles in FY96/97. The executed mandatory separations and unprogrammed losses were part of the statistical analysis which formed the predictions/assumptions for the five year period of FY99–03, and so are valid as current execution figures for FY96/97.
Foreign National Pilot Training
Mr. COMBEST What were the Air Force predictions/assumptions for foreign national and instructor pilot training for 1995–1998? What were the actual figures? What are the Air Force predictions/assumptions for the next five years?
General SAUNDERS. This table lists the number of foreign nationals students who entered Specialized Undergraduate Pilot Training (SUPT) and Euro-Nato Joint Jet Pilot Training (ENJPPT) training along with the number of actual attrition, the number of Programmed Graduates and the associated attrition rate.
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Incorporated into this table is the foreign Pilot Instructor Training (PIT) numbers also. PIT is the school for training Instructor Pilots. Foreign IPs can be trained in either the SUPT PIT or ENJJPT PIT depending on where they will be instructing.
Disparity between less actual grads than programmed can be attributed to countries not providing enough entries to fill the quotas or in cases where actual grads exceed programmed grads, actual attribution was less than what was programmed.
Programmed/Predicated number of entries into 1998 classes:
Students: ENJJPT 128; SUPT 50.
Instructor Pilots: ENJJPT 56; SUPT 25.
The following lists the programmed/predicted number of foreign student graduates from SUPT and ENJJPT over the next 5 years:
The following lists the programmed/predicted number of foreign Instructor Pilot graduates from both the SUPT and ENJJPT Pilot Instructor Training course over the next 5 years:
Pilot Attrition
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Mr. COMBEST. What were the Air Force predictions/assumptions for pilot attrition for 1996 and 1997? Please compare this to actual figures for 1996 and 1997?
General SAUNDERS. The Air Force uses a Rated Management Decision Support System (RMDSS) to model projected pilot inventories and losses throughout the FYDP. There are numerous variables input into this model that project our gains/losses. These include separations, Aviator Continuation Pay accept rate, retirements, deaths, medical grounding, promotion to O–6, production, deferred to promotion, and recall. At the beginning of each Fiscal Year the system is updated to reflect actual losses and inventory as a starting point, and the variables are examined and adjusted based on historical data and future projections. Below are the projected and actual pilot losses for FY96 and FY97:
INSTRUCTOR PILOT RETENTION
Mr. COMBEST. Please provide data on instructor pilot retention since 1996 and data regarding instructor pilot workload (i.e., how many flights per day; how many working days per week, etc.)
General SAUNDERS. Refer to question 11 for pilot retention figures.
Average Instructor Pilot (IP) Workload:
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Scheduled to fly 1.8 flights per day;
Average Duty Day 10 hours; and
Assume 5 day work week, however, average 4 weekends per year performing student training and 2 weekends per year performing continuation (proficiency) training.
Assumption: this question is directed at Undergraduate IP workloads.
Flying Experience
Mr. COMBEST. What is the average flying experience level for pilots over the last five years?
General SAUNDERS. For purposes of this response we have measured experience as number of flying hours and number of months accumulated while actively flying (gates).
This table is a snapshot of all actively flying pilots at the end of each FY (93–97). The table is broken down into number of Pilots and Mean (average) number of Hours/Gates.
First Assignment Instructor Pilots
Mr. COMBEST. What is the trend in hiring First Assignment Instructor Pilots for the last five years and what is the expectation for their use in the next five years?
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General SAUNDERS. The Air Force has programmed the following number of pilots from Undergraduate Pilot Training into the First Assignment Instructor Pilot (FAIP) program:
Rated Management policy dictates a Major Weapon System (MWS) follow-on assignment following a three year FAIP tour. FY94 thru FY97 assignments were exclusively to airlift/tanker aircraft. In FY98 and beyond, 50 fighter FAIPs were added to the program and are included in the total of 90.
MILITARY TRAINING ISSUES
House of Representatives,
Committee on National Security,
Military Readiness Subcommittee,
Washington, DC, Monday, March 16, 1998.
The subcommittee met, pursuant to call, at 9:30 a.m., Officers' Club, Fort Monroe, Hampton, Virginia, Hon. Herbert Bateman (chairman of the subcommittee) presiding.
OPENING STATEMENT OF HON. HERBERT H. BATEMAN, A REPRESENTATIVE FROM VIRGINIA, CHAIRMAN, MILITARY READINESS SUBCOMMITTEE
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Mr. BATEMAN. The subcommittee will come to order. I would like to welcome everyone here today to the second of a series of field hearings that the Subcommittee on Military Readiness will hold this year.
It is the distinct and personal pleasure for me to hold this hearing at historic Fort Monroe, VA. Fort Monroe is a visible symbol of the U.S. Army's military capabilities. Conducting a readiness hearing here on these hallowed grounds is significant in that military readiness begins here with the Training and Doctrine Command [TRADOC] and can be seen, heard, and felt firsthand here. It is also significant that many of the military services operational bases are nearby.
I believe that it is important to get out in the field and hear from the individuals at all levels who are charged with making readiness work. I also believe that it is important that all levels of military personnel have the opportunity to view the process by which Congress and the House Committee on National Security exercises its oversight responsibilities, which are mandated by the Constitution of the United States.
We are here today not so much as to ask questions, but rather to listen to our witnesses give their own personal perspective on training and education issues.
Today, we will hear from the four military services about their training programs. Training, in my opinion, is one of the cornerstones of readiness. And like readiness, once you find out it is broken, it is usually too late to fix it.
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One of the concerns that I have in this area is the cost of training. An analysis of the Department of Defense's end strength training workloads and overall training budgets since 1987 shows that end strengths and training workloads have decreased at a much greater rate than training budgets.
During this time, the Army has reduced from 18 to 10 divisions. The Navy is reduced by nearly half the number of shifts it operates. And the Air Force is reduced from 24 to 19 fighter wing equivalents.
Overall military personnel downsizing has taken us from approximately 2.2 million active duty servicemen to the budget request level for fiscal year 1999 of 1.4 million active duty soldiers, sailors, airmen, and marines.
Also during this same period, the training workloads for formal training and education programs decrease at about the same proportional amount. However, military personnel funding for students, instructors, management, and training support decreased only by about one-half the proportional amount. And, in fact, operations and maintenance funding, which is used to pay civilian and contractor instructors and to operate, maintain, and support training facilities and equipment, has increased about 30 percent.
As everyone here today is well aware, O&M funding is being stretched to the limits. We must get the most effective use out of each and every O&M dollar.
I am also concerned with the quality of the training that our military members are receiving. Some of the questions that I would like addressed today include: Are the military forces receiving the required training to develop the necessary combat skills to not only fight, but win in any potential armed conflict? Are the training centers adequately funded, and do they have all the necessary equipment to perform their training? Is the equipment that the training centers train with the same or similar to the equipment the trainees will be assigned to on completion of training? And are the services accomplishing the levels of training needed to sustain individual combat capabilities?
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I would also like to hear about some of the new technologies that the military services are using to improve training and to fill in when there are insufficient funds to accomplish training in the field, such as distance learning and simulation. Some of these new technologies may improve the methods by which we train, but we must balance these methods with the actual hands-on training that has served us so well in the past.
I believe this hearing today will be one of the more important hearings the subcommittee will have this year. It is important that the members of the subcommittee hear what is really going on from a cross-section from our military service members who are in the know on these issues. Our aim today is to hear from those who have to deal with the day-to-day training and education challenges of their respective services.
We are very fortunate to have two panels of persons representing the four military services. The first panel is composed of top-level training commanders who will give us their views from the big picture point of view. The second panel will have commanders of individual training centers who will give us their perspective on the actual accomplishments of training.
Mr. BATEMAN. Before we get into the hearing from our panels, I would like to yield to my good friend and colleague, and our neighbor from across Hampton Roads, the Honorable Owen Pickett for any statement he would like to make.
STATEMENT OF HON. OWEN PICKETT, A REPRESENTATIVE FROM VIRGINIA, RANKING MEMBER, MILITARY RESEARCH AND DEVELOPMENT SUBCOMMITTEE
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Mr. PICKETT. Thank you, Mr. Chairman. And I join you in welcoming our witnesses and guests here today to wonderful and beautiful Fort Monroe. I am especially pleased to be a part of this field hearing to continue our understanding of how the readiness issues are perceived by those in the field having the responsibility for training.
I've heard repeatedly this session that the tip of the spear is ready. Combatant CINC's and commanders and senior enlisted personnel are the sources of this assessment. However, they have also shared with us that the high readiness at the tip of this spear comes at a price for the rest of the force. What has not yet been clearly articulated is the impact of that readiness on the training infrastructure.
Your perspectives on the impact of the high operations tempo combined with the severe budget constraints will help us understand what we in the Congress should be doing to help you reach your readiness goals.
I am particularly interested in understanding if you are adequately resourced with the experienced personnel and funds to develop the tactics and doctrine necessary for the conduct of joint and coalition warfare that is expected in our future security environment. And I look forward to your testimony. And I know that we will enjoy being here with you today.
If I may, Mr. Chairman, Congressman Ortiz was unable to be in attendance today. He has a statement that I will submit for the record. He did want to extend a special welcome to someone from his district down in south Texas, Rear Admiral Bucchi, The Chief of Naval Aviation Training. And I will do that on his behalf and offer his statement for the record.
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Mr. BATEMAN. Very good. It will be made a part of the record without objection.
[The prepared statement of Mr. Ortiz can be found in the appendix on page 915.]
Mr. BATEMAN. I am pleased to also recognize my colleague and neighbor in Newport News, Congressman Bobby Scott. Congressman, do you have any comments you would like to make?
Mr. SCOTT. Thank you, Mr. Chairman. And I appreciate the invitation to join you and Owen Pickett. Hampton Roads is very well represented on the National Security Committee. Not only Mr. Pickett, Mr. Bateman, but also Mr. Sisisky from Petersburg in the Fourth District represent the area extremely well.
We have a strong interest in the military in this area, not only because we have so many military bases and the impact it has on the business community, but also the fact that we have representatives from all the services in this area means that we are in a position to make quite an impact.
We have a very challenging—we have a very significant challenge before us because of the budget constraints. We are balancing the budget, and the budget is always extremely tight. We want to make sure that we balance that budget without making cuts in essential long-term investments in things like training and maintenance.
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So I look forward to the testimony of the witnesses and the—again, I appreciate the invitation to join my colleagues on the National Security Committee this morning.
Mr. BATEMAN. Thank you very much, Congressman Scott.
Our first panel of witnesses consists of Gen. William Hartzog, commanding general, Training and Doctrine Command, Department of the Army; Gen. Lloyd W. Newton, commander, Air Education and Training Command, Department of the Air Force; Vice Adm. Patricia A. Tracey, Chief of Naval Education and Training, Department of the Navy; and Lt. Gen. John E. Rhodes, commanding general, Marine Corps Combat Development Command, Quantico, VA. We are very pleased to have you.
General Hartzog, you may proceed as you desire at this time.
STATEMENT OF GEN. WILLIAM HARTZOG, COMMANDING GENERAL, TRAINING AND DOCTRINE COMMAND (TRADOC), DEPARTMENT OF THE ARMY
General HARTZOG. Thank you, Mr. Chairman, and members of the committee, staff members, and guests today. Welcome to Fort Monroe. I am Gen. Bill Hartzog, the commanding general of the U.S. Training and Doctrine Command. I am certainly honored to appear before the committee today to talk about Army training.
Since 1973, when it was formed here, the Training and Doctrine Command has had three missions. One was to prepare the Army for war. Now, by saying that, I mean that we run the institutional, educational system for the Army. Second, we are the architect for the Army's future. We try to develop the modeling and the organizational and equipment that is necessary in our future force. And, third, we run an organization that is capable of doing those two tasks, no mean challenge today in our current resource environment.
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Our primary mission, of course, is to prepare the Army for war. And, in fact, that is what the hearing today is all about. We accomplish these missions today on 16 different installations across the United States, and on those installations we have 27 different schools with about, oh, little over 50,000 staff and faculty of which 10,000 are actually instructors in the classrooms. We provide training to about 390,000 Active and Reserve component soldiers each year. And some 20,000 sailors, airmen, marines, Coast Guardsmen from sister services also attend our schools.
Further, we have about 1,500 foreign students from 150 different countries attending our schools each year. And we, in fact, have liaison detachments in 14 different foreign countries.
We write the doctrine, publish the material requirements for the Army, as well as conducting many joint initiatives and joint projects. We use our institutional training base to ensure that the intellectual effort is synchronized across the Army. This is, I would say, the intellectual foundation for our force.
This is where we mold all of the Army's military branches, the infantry, armor, artillery into combined arms operations. TRADOC is also in charge of the observer controllers at the Army's Combat Training Centers. We collect the exercises and lessons learned from field training that is going on around the world today. There are 100 plus of our officers and noncommissioned officers in Bosnia collecting on those things. We send those lessons learned directly, electronically, to an electronic holding area at Fort Leavenworth, KS; and that data collection base gets about 400,000 inquiries from around the world each week. So it is a very active process. We feed those lessons learned back into the schoolhouse and into our units so we derive the maximum benefit from them.
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The Training and Doctrine Command is also responsible for running the Army's ROTC and JROTC programs. We have about 41,000 ROTC students going through our colleges each year. In 1997, we commissioned about 4,100 second lieutenants. We have 230,000 high school students that are enrolled in our Junior ROTC programs, and our goal there is a very serious and very important one. It is to teach responsibility and civic-mindedness and to generate a little bit of self-discipline at that age level.
Now, we do all of these missions each year on a budget of about $2.7 billion. As I said earlier, we have about 56,000 soldiers and civilian employees in our staff and faculty, another 50,000 to 60,000 students each day. So every morning when we wake up, there is about 110,000 to 120,000 people in this command.
I would like to mention, also, that 7 of our 16 installations are also what we call power projection platforms. That means that they have within them battalion or larger-size deployable units. Places like Fort Benning, Fort Bliss, TX, Fort Eustis, Fort Knox, Fort Lee, Fort Leonard Wood, Fort Sill, all of these have combat forces that we are responsible for deploying or being capable to deploy.
As you know, the most deployed unit in the United States Army is the 7th Transportation Group just up the road at Fort Eustis. I can assure you that we are gainfully employed in doing those things. In fact, I think we are more than gainfully employed to the resource effort match.
Since 1989, we have taken cuts of about 31 percent in dollars, pure dollars, and 39 percent in manpower. In the meantime, in that same period, the Army has endured cuts of about 34 percent in dollars and 38 percent in manpower. And in that same time frame, our OPTEMPO across our forces are up some 300 percent in terms of what we are doing and where we are deploying.
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The heart of that is the TRADOC was created in 1973 for a real purpose. At that time there was a general malaise that had been steadily occurring in the Army, probably, truthfully, since about the end of World War II. And by the time of the early 1970's, Vietnam had taken its toll in things like the size and quality of the force. The force was changing from a draft Army to an all-volunteer force. Things like our doctrine, how we fought, our training, our equipment for training, and our force designs were all outdated, and some of them have become strategically irrelevant.
So TRADOC was created then and carried out a substantial revolution in training reform and doctrine revision, in how we recruit our force and how we equip our force, and in how we modernize it. And we produced an Army that, by about the mid-1980's, we called it a euphemism, the Army of excellence.
It was that Army with its heavy, light, special operations forces, its training revolution, the quality of people that we had recruited that fought our battles in Panama in 1989 and in Operation Desert Storm and Desert Shield in the Persian Gulf in 1991, two inarguably excellent operations.
Now, the reform of the Army was successful because of the approach the senior leaders took for that change. And I think this is the key point. We tried very hard not to unbalance the force in any dimension.
There were six areas that we felt were important. Our doctrine, our consensus of opinion on how we operate so that each soldier understood that as a background to do other things; our organizations that were appropriate for the kind of equipment and missions that we had at the time; our unit training; how you train units in a hard, challenging way at our training centers; how you develop leaders over a linear, repetitive, developmental, ever-increasing leader development program; and, finally, the quality of people that man our force. Those six things are to be in balance if we are to move forward and meet the Nation's need.
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I think men like Gen. Bill Depew, Lou Minitry, Bill Tuttle, Bill Richardson, Carl Vuono, and others worked with you along the way to resource and build a balanced Army of that sort. And that is the Army that we have had up to and through most of the 1990's.
In all of their work and in all of their guesses, their assertion was, I think, a correct one, that readiness is not just modern weapons platforms, and it is not just ample training schedules, it is all six of those things, the right doctrine, organization, equipment, unit training, leader development, and people in balance.
Those six areas represent the Training and Doctrine Command today in the way we do business as the foundation for the Army's readiness. We think the Army rests on that foundation. We work very hard to make sure that that foundation doesn't erode. And I look forward to talking to you today about where we think we are with respect to the resources to ensure that that balance is kept.
What does it all mean? We think that the readiness of TRADOC has a significant and keystone impact on the readiness of the Army as a whole. We prepare the Army for war. We prepare it for the future. It is very serious business that we are involved in, and I think you have seen and will see today the professionalism with which we approach our mission throughout the course of the field hearing.
Sir, that concludes my opening statement. I would ask that the written statement that I forwarded be included in the record, and I welcome the opportunity to participate with you today.
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Mr. BATEMAN. Thank you very much, General Hartzog. Your written statement will be made a part of the record, as is the case with each of our witnesses this morning.
[The prepared statement of General Hartzog can be found in the appendix on page 916.]
Mr. BATEMAN. Next we would like to hear from Gen. Lloyd W. Newton, commander, Air Education and Training Command. General Newton, pleased to have you this morning.
STATEMENT OF GEN. LLOYD W. NEWTON, COMMANDER, AIR EDUCATION AND TRAINING COMMAND, DEPARTMENT OF THE AIR FORCE
General NEWTON. Thank you, sir. It is a great pleasure to be here. Mr. Chairman, members of the committee, and to your staff, again, it is a real honor to be back in the Tidewater area and to participate in this hearing out in the field.
Let me assure you that the American public, without question, today has the world's finest aerospace force. It is a force built on the foundation of patriotism and teamwork, men and women trained, educated, and equipped to win our Nation's wars.
According to the Harris war poll, our Armed Forces have earned the public's highest level of confidence, higher than any other institution in our country. I think this speaks very highly of the men and women who work for us.
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America's airmen stand at the watershed of our history, a time when we reflect on the 50-year tradition of providing highly-respected, combat-ready aerospace forces for the defense of our great Nation. It is also time when we look forward to the promise and the challenges of the new millennium and the 100th anniversary of powered flight in 2003.
Throughout our history, the Air Force has shown a unique ability to adapt to changing national security demands. The merging national security environment of the 21st century requires us to overcome the next challenges, the challenges of time and tempo. Since the end of the cold war, the size, composition, and requirements placed on our force have changed greatly. In 1989, the Air Force averaged 3,000—approximately 3,400 personnel deployed daily from their home unit to contingencies and exercises. In 1997, the daily average grew to more than 14,000. For the foreseeable future, aerospace forces are likely to remain in high demand. Many Air Force members will spend 1 of the next 3 years away from home.
To adapt to these changes, the Air Force has focused its efforts on refining the doctrine, structure, and, most importantly, the expeditionary culture within our force. We are presently studying how to restructure our force to better support our expeditionary nature and meet tomorrow's commitments. We continue to pay for excess support of infrastructure with decreasing budgets, straining our ability to fund key priority programs. We have too few forces spread over too many bases. When we deploy forces to support contingencies, those remaining behind must still accomplish a local mission, often with too few folks to get the job done. We need to ensure the structure remaining behind is robust enough to meet the mission. We need to streamline our infrastructures to meet the challenges of our expeditionary Air Force.
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Expeditionary means having the force that is fully capable of using the unique aspects of aerospace power, range, speed, flexibility, and precision, to their fullest capability. It means being a force which is mentally prepared, procedurally sound, technologically advanced, appropriately organized, adequately supported, and well-led to be able to respond to the world events within hours, not days.
The key to this expeditionary force is the men and women of the U.S. Air Force. They are our most vital resource. They always have been and will always be the key to readiness. The intense demand we place on our people as they perform Air Force missions around the world require individuals who are highly motivated, well-trained, and well-educated.
The Air Force needs this caliber of people to perform our core competencies: air and space superiority, precision engagement, global attack, rapid global mobility, information superiority, and an agile combat support. Training and educating our air personnel is essential to ensuring that these core competencies are available to the joint force commander.
While 91 percent of our active and Air Reserve component units are maintaining good readiness levels, there are areas of concern. Most notably, pilot and navigator retention have decreased markedly, second-term reenlistment rates in some critical skills are declining as well, and we are dealing with an aging aircraft fleet with engine and spare part shortages.
As you have heard from other witnesses, the U.S. Air Force is taking steps to try to address each of these readiness challenges. We judge readiness through objective and subjective assessments of several interdependent elements, including personnel, equipment, logistics, financial resources, and training. A shortfall in any of these areas will negatively impact our overall readiness.
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Personnel are the foundation upon which we lay other building blocks of readiness. But personnel must be trained and educated to execute their combat skills to be that foundation.
As the commander of Air Education and Training Command, I am responsible for recruiting, training, and educating quality people for our aerospace force and the Nation. Let me assure you we take this responsibility seriously. Annually, we provide accession, initial, advanced, and continuation skills training as well as professional military training and continuing education to over 370,000 students.
I would like to cover all three of the command's mission areas, because I feel they are at the heart of today's discussion.
Recruiting is essential to readiness since the quality of the individual we bring into the Air Force directly translates into the quality of the new airmen we deliver to operational commands and the joint force commander.
While we continue to meet our recruiting goals, there are disturbing trends. Ample opportunity to attend college, a robust economy, low unemployment, military drawdown, and highly visible U.S. commitments abroad have decreased the pool of interested and qualified potential recruits.
Interests among young men in serving in the Air Force has dropped recently, while the interest among young women serving in the force remain relatively constant. Additionally, there have been a decline in the number of enlistees scoring in the top half of the Armed Forces qualification test.
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Overcoming our recruiting challenge is essential to maintain the caliber of airmen necessary to effectively serve in today's technologically sophisticated aerospace force. We will continue to need your support as you have given it to us in the past if we are to persist in our efforts to recruit only the highest quality people.
Training, in its classic definition, is giving people the hands-on skills they need to perform our jobs. Our ability to produce quality graduates with the right skills directly affects the readiness of the operational units. We have made a concerted effort to standardize training across the Air Force, reduce training infrastructure, and, most importantly, relieve the operating command of much of the burden of training, allowing them to better focus on the operational mission.
Under the Air Force's year of training in 1993, we moved a great deal of training from the operational units into our Education and Training Command. The training we conduct directly contributes to the readiness of the operational units.
Trainees arrive at their units knowing their jobs and ready to go to work. There are many cases where our trainees, upon arrival at their initial duty station, have deployed to Southwest Asia or some other contingency within weeks upon arrival. These contingencies hope to validate that our graduates are able to contribute to readiness on day one.
There are several issues impacting our ability to provide the best possible training. I would like to highlight just a few.
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Engine readiness and spare parts are impacting our ability to train in our F–15's at Tyndall Air Force Base in Florida, our F–16's at Luke Air Force Base in Arizona, and our C–5's at Altus Air Force Base in Oklahoma. Across the Air Force, old age has increased the difficulty of keeping airplanes flying and has raised the cost of readiness. Increased OPTEMPO and corresponding high PERSTEMPO are impacting our training program as well. When people deploy, duties are spread among the remaining personnel. As a result, our people are being pulled away from their primary training duties.
The real impact, however, is felt by the operational commands which are unable to free up their deployed personnel for specialty and skills training. This impacts both the individual who falls behind in his or her career progression and the operational readiness of our war-fighting commands.
Mr. Chairman, highly qualified training is vitally important to the individual and the unit readiness. But equally important, we feel, is education. The Air Force strongly believes that an educated airman brings more to the fight. While training gives our people the will and the skill they need to perform their war-time task, education enhances their ability to understand the military role as an instrument of the diplomacy.
In addition, professional education provides members with the intellectual resource to perform more capably within their career field and make them better airmen, supervisors, strategists, and Air Force leaders.
Our people must be intellectually prepared to assume the leadership position in the Air Force and within the joint and coalition forces.
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As an expeditionary aerospace force, we must develop warrior leaders who can successfully lead air forces and others with a wide variety of capabilities into hostile, austere environments. The superior technology of the United States will only be successful if we employ well-trained, well-educated, and capable warriors.
Training and educating our people are of low value if we cannot retain them long enough to benefit from their skill and experience. Unfortunately, there are troubling trends in this area. Our first- and second-term reenlistments rates have declined in each of the past 2 years. Declining pilot retention is affecting our experience base and may ultimately take a toll on readiness. Maximum production and lower experience level places a huge demand on the training system and will require careful management over the next several years as we explore opportunity to properly size our flying training infrastructure.
Today's witnesses have testified that training and education are readiness. Our airmen must have the required skills and education to win our Nation's wars. Traditionally, training has been viewed as infrastructure. Therefore, as we move to reduce infrastructure, training becomes vulnerable to the same level of reduction. Because we feel training and education is a readiness issue, we should fund them accordingly.
In conclusion, Mr. Chairman, the U.S. Air Force is the most respected aerospace force in the world today. We have good equipment, operated and maintained by outstanding committed men and women. However, there are cautionary signs in our readiness trends. Difficulties in recruiting high-quality people, an aging aircraft fleet, shortages of aircraft engines and spare parts, troubling retention statistics, and high operation and personnel tempo are requiring our careful attention.
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We thank you as you provided for us in the past that great support that we have always needed; however, we will continue to ask for your support as we work through these challenges. We also will need your help to probably structure the force to meet our air expeditionary commitment.
Additionally, we need to send, we feel, a message to our American military personnel and their families that the Nation's leadership value their sacrifice and their contributions. We are asking our people to do more, and they are accepting the challenge. Our commitment to give them the requisite technical skills to perform the mission and the intellectual ability to lead and manage change is key to maintaining our Nation's readiness. Training and education are the foundation of readiness.
I certainly thank you for this opportunity, and I will look forward to the questioning.
Mr. BATEMAN. Thank you very much, General Newton.
[The prepared statement of General Newton can be found in the appendix on page 928.]
Mr. BATEMAN. Now we have the pleasure of hearing from Vice Adm. Patricia A. Tracey, Chief of Naval Education and Training for the Department of the Navy.
Admiral Tracey, we are pleased to have you and look forward to hearing your testimony.
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STATEMENT OF VICE ADM. PATRICIA A. TRACEY, CHIEF OF NAVAL EDUCATION AND TRAINING, DEPARTMENT OF THE NAVY
Admiral TRACEY. Thank you. Mr. Chairman, distinguished members of the subcommittee, I appreciate this opportunity to discuss the status of Navy training.
Today, as we speak, the men and women of our Navy are demonstrating the effectiveness and relevance of Navy training in the Arabian Gulf, in Bosnia, in counterdrug operations in the Caribbean, in multinational exercises in the Western Pacific theater, and around the world.
This list of current operations provides a measure of the variety of operating environments for which the men and women of our Navy must be prepared today. And ships and squadrons deployed to any one of these sites could find themselves tomorrow called upon to perform missions anywhere on the spectrum of conflict, from humanitarian operations to air strikes.
The American people have high expectations of our Navy. We meet those expectations by trusting all of our people, including our youngest members, to perform their duties flawlessly, on time, every time.
Navy forces deployed today are equal to that challenge because of the combination of individual and fleet training they received in preparation for deployment. Without it, replacements would not be qualified, perishable skills would be lost, and complex processes of blending individual skills to create a combat-ready force would not occur.
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Future readiness depends on being able to repeat that process for every ship and squadron that deploys. While the size of our Navy has been substantially reduced, the demands on our training processes have in no way diminished.
The unpredictability of the operating environment, coupled with the expectation of successful execution of every endeavor, demands a higher level of proficiency across a broader spectrum of possible missions. Effective, efficient, individual training of every crew member is the essential prerequisite.
We've reduced our training infrastructure, thereby reducing overhead. But in the process, we have lost some of our flexibility to surge; and it is taking longer than we would like to get a trained sailor to the fleet.
As Vice Admiral Browne and Captain Kilcline indicated in their testimony a few weeks ago, meeting prerequisite training requirements in time for each crew member to participate in essential team, unit, and battle group training is challenging. Clearly, how well we recruit, whether sailors are able to move with enough lead time to complete training en route and whether that en route training is funded all play in this equation. Equally as important, however, is modernizing and reengineering our schoolhouse training so that sailors can complete training in less time and with greater comprehension.
We have undertaken a number of initiatives to allow the Navy's training process to keep pace, much of which requires up-front investments. We have begun to re-engineer training to focus on core skills, capitalize on existing technologies to improve remediation, increase proficiency, and accelerate learning to cover the increased number of skills required in the same amount of time. We are leveraging training technology to move training to the sailors in order to reduce the travel required of our career force.
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We continue the process of innovation in fleet and unit training. For example, a recent exercise in southern California combined Navy ships and aircraft at sea in California with submarine and surface ships in Hawaii. This creative use of technology allows units of a battle group to practice together months before they join to deploy. These exercises prove themselves very useful in exercising commanders in the command and control of forces and in providing unit commanders an opportunity to work with the operational commander in a high-stress environment.
Other advances allow us to take advantage of modeling and simulation technologies. These investments are being made to maintain the quality of fleet training and augment live services while not increasing OPTEMPO. While already successful, we need to expand these modeling and simulation initiatives to make them more challenging and more realistic.
The great irony of training is that when it is done well, it is invisible. When everyone knows what to do and does it, things go smoothly. Only when training is incomplete does it gain visibility.
Today, the Navy's forward deployed force is ready. To ensure that the next ships and squadrons to deploy are as ready, we must preserve the training continuum, from individual to team to unit and battle group.
We cannot ignore three important truths. One, we cannot have a ready force if it is not trained. Two, our training will not continue to be successful if it does not keep pace with the changes in our operating environment. And, finally, when today's training resources are at risk, our future readiness is at risk.
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Your continued support for the proper funding of training, training support, and the personnel accounts to allow us to move people on time via the required training is essential.
Mr. Chairman, thank you, and I look forward to your questions.
Mr. BATEMAN. Thank you very much, Admiral Tracey.
[The prepared statement of Admiral Tracey can be found in the appendix on page 943.]
Mr. BATEMAN. And now we have the pleasure of hearing from Lt. Gen. John E. Rhodes, Commanding General, Marine Corps Combat Development Command, Quantico.
General, pleased to have you.
STATEMENT OF LT. GEN. JOHN E. RHODES COMMANDING GENERAL, MARINE CORPS COMBAT DEVELOPMENT COMMAND, QUANTICO, VIRGINIA
General RHODES. Good morning. I would like to thank you for this opportunity to address the committee and discuss the Marine Corps training programs and their contributions to readiness.
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I want to begin by emphasizing that our training continuum is providing marines with the characters and skills the uniformed CINC's require and have come to expect. In short, we are providing highly ready forces. However, that readiness is coming at an increasingly high price.
The demands of the current and projected operating environments are increasing both in the number and the complexity of our training tasks. Further, our Nation's near zero tolerance for casualties and the scrutiny of the media mandate that those tasks be performed to near perfection. At the same time, our resources to support training are going down, and our training infrastructure is aging.
In sum, we have a very challenging situation in which the number, complexity, and standards of training tasks are increasing while, at the same time, our resources and infrastructure are declining.
We are able to continue to meet our readiness standards, but we are doing so by asking our people to work longer, work harder, and work more intensely. Our major training modernization initiatives are all focused on wringing the maximum effectiveness and efficiency out of all resources: People, time, ammunition, and money. When viewed in the larger context of high operational tempo and multiple routine and contingency deployments, we see that our marines and their families have no respite.
A particular challenge for me is balancing the modernization requirements of our operating forces for those of our training establishments. Frankly, in the competition for scarce resources, our training establishment is coming in second to the operating forces. We know we should be investing more in range instrumentation systems which will give our marines the opportunity to fight multiple engagements against the asymmetric urban forces that we think they will meet. We know that the training edge afforded by simulation and range instrumentation will enable mission accomplishment with significantly fewer casualties. However, there is only so much in the top line. And we also know that we must invest in modernizing our force.
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Training in the operational units suffers because scarce O&M dollars and precious time and people are being expended to maintain aging equipment. In the struggle to provide highly ready units, we find ourselves constantly adapting, focusing, and shifting resources. We are making it, but we are doing so because of our marines, their pride, and their self-sacrifice, and their commitment.
I thank you for this opportunity and look forward to your questions, sir.
Mr. BATEMAN. Thank you very much, General. And I thank all of the members of the panel.
[The prepared statement of General Rhodes can be found in the appendix on page 950.]
Mr. BATEMAN. Admiral Tracey, your Navy has certainly been putting on a display for our viewing pleasure. As we sit here listening to your testimony, I have seen an aircraft carrier put out to sea followed by a submarine. So the Navy is very busy this morning. I am likewise sure that the good folks of the Army, the Air Force and the Marines are also busy doing their thing today; they are just not as visible to our inspection as the water has been this morning.
Thank you all for being here and for your testimony. We are concerned, as you are, that, in an era of declining budgets that have gone on now, I think, for 13 consecutive years, and diminishing end strengths, plus an increasingly active operational tempo, that we may be putting stress on readiness. And one of the first places that will show up is, of course, in the training function, which is at the very heart of future readiness. And so we have been particularly interested in hearing the views, getting the views, and being able to ask questions of the people who are in charge of the training for all of the military services.
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I guess, fundamentally, we need to know whether or not training is receiving the amount of support and assets that are vital to the success of your mission. What are your funding shortfalls? Are you able to achieve your objectives with the resources you have been given, or are you short in those resources? Any of your comments would be welcome.
General HARTZOG. Sir, with your permission, I will begin. I think that it is important to understand that, at least in the Army's establishment here, we do a number of things within the command. A way to look at that is we are responsible for institutional training, running the schoolhouses. And I have told you a little bit about the size of that challenge.
We are also responsible for training support and training developments; that is, building the simulators necessary, building the doctrine, the training doctrine necessary, and providing the undergirding so that training can go on both in the schoolhouses and in the units in the field.
While I am not responsible directly for the readiness and training levels of the units in the field that is executed through the forces command, I do provide them things like the training experience at the combat training centers [CTC's], as you well know, and in development of simulations and the other kinds of materials that they need to do that training.
The second thing that we do is provide the undergirding educational materials to the field that allow a consensus of opinion on how we operate our doctrine to permeate. And that is something that the Army believes is very important, has been one of the things that we hold as the key—key enabler for combat. That is, that each of us understand how the Army operates.
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And, finally, we need to move to the future. As my—as my colleague said to my left here, one of the things that we deal most with is balancing that. And we view it as balancing near-term readiness with future readiness. We are called and we are deployed daily around the world, and so we cannot have a time-out period in which to revise, prepare for a future that we may have to do later. It is a daily business.
With that as the balancing act that we do each day, in 1998, our budget had—has dwindled from 1989 to a point where it is very difficult to do that. And the difficulties are as follows: I have to train the force. I must train the force to standard so that no soldier can look back and say, I wasn't trained from a perspective of disaster. And so we do that, and that causes me to prioritize our efforts.
I fill instructor positions first. I fund instructor experiences first. I put the money in the priorities in each of the installations in those experiences where an instructor is teaching something to a pupil, and I make sure that that is fully funded.
Now, someone has to pay for that in the shortfall, and some function has to pay for that. I cannot prioritize in the training and doctrine command between branches because we believe all of our branches are important. The infantry and the armor and the artillery alone, without the support of logisticians and the other parts, are not effective. So the prioritization has to be between functions and not between posts or installations.
What I have done is I have traded off doctrine development, training support, and training development. And to some extent, we have had to centralize combat developments in one experimental force. And by doing that, we are able to pay for and assure the training experience itself is fully funded and fully capable.
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In 1998, that has caused us to look at diminishing or reducing some of the infrastructure that we have. In the BRAC process, we have one post that is closing, Fort McClellan. It will be substantially closed by fall of 1999. And the efforts that go on there will be consolidated into Fort Leonard Wood. We will begin to accrue the savings from that in about the turn of the century or a little bit after that.
As you well know, when you close an entire installation, there is a capital investment regarding or involved in the closure. We are in that period today. So we have yet to accrue efficiencies or pluses from that effort. I think we will. Therefore, we have to fund our reducing budget from efficiencies from within the current force.
In the last 3 years, we have torn down enough unneeded infrastructure and aging infrastructure from within the post that we have to be roughly the equivalent of two posts the size of Fort Gordon, as an example. That gives us very little flexibility. So if our training loads go up, there is not much World War II wood left anywhere in which to put them. That creates overcrowding conditions and all of the problems that come along with overcrowding. So that is one of the concerns that we have.
The second concern I would give to you is 1999, the budget year is less than 1998. And we will have to create in our command somewhere on the order of $200 million worth of efficiencies to live in 1999 at the same levels that we are living today, which are very tight.
I have submitted to the Department a statement that said we need about $140 million that we do not currently have budgeted in 1999 to retain the same levels we have today. That breaks down to about 400 military spaces and about 440 civilian spaces. While these numbers may seem small in the bigger context of things, they are crucial to maintain the quality of training and the quality of the force that we have in Bosnia today and the other deployable places around the world.
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The second thing that we are trying to do is build for a training readiness in the future, and by doing that, we have built a model of a division that we believe is essential and can be effective in about 2010, and we have done that. We have consolidated our lessons and worked hard at building that model. We know what it looks like. We have tested it, experimented with it, probed it, worked with it, and have a good feeling for what it can do. And the moneys to build that into a deployable division by 2000 have wisely been put in the budget by you and your comrades, and it is funded, and we feel comfortable that it will come.
What we don't know is what sort of training developments have to be undertaken between now and that time frame and whether or not we can fund all of those. And they are things like proliferated distance learning. They are things like the enhanced and upgraded use of a lot of simulations. They are things like the combining of live constructive and virtual realities, as the admiral mentioned a few moments ago, which we do routinely. But all of those things will require capital investments to put the systems in place at the beginning. This is all in the face of a time when we are continuing to reduce our budget and reduce our civilian authorizations.
The last thing I would like to mention that bothers me and what we need to work at a bit is we have a continuing diminution in our civilian work force. In an institutional part of the Army, the civilian work force, the continuity and expertise that that offers us is crucial, as you well know. And the average age of the work force has gone up because our work laws say that—civilian work force laws say that, as we diminish the force and take it down, it is, in layman's language, last in, first out. And that causes a lot of our senior employees to be—who want to continue to work, and very dedicated and committed, to work in jobs that are below their current skills and that we would like to build a younger force, an entry level to deal with.
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All of those are concerns that I have. In summary, I would say that we will get through 1998 because of the efficiencies we have put in place, assuming and understanding that we have prioritized for training and paid for that by lengthening the times and increasing the backlogs of training support, training development, doctrine development, and combat developments that we need to be doing.
1999 is a different issue. And I have submitted the requests to the Department, and they are under consideration today, to keep us at the same level that we are today and not to diminish any further.
Mr. BATEMAN. Thank you, General.
Admiral.
Admiral TRACEY. Sir, our funding levels are adequate to continue to provide individual training, but not in the way in which we would like to. In order to sustain the quality of young men and women coming into our Navy, we are tending to bring in higher percentages even than historically the case in the late summer, which is adding to a backlog of students awaiting instruction in our initial skills schools.
That is a place where the application of technologies would yield us real benefits in the ability to turn sailors out to the fleet on time for them to meet their training requirements with their deploying units. Those investments require up-front cash in the O&M accounts. In order to make them occur, we have plus-ups in both our 1998 and 1999 budgets to accomplish those.
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The second phase of our officer training is the en route training that is provided to our career force sailors who are rotating back to sea duty from a shore duty assignment. Effects in the NPM account for permanent change of station [PCS] dollars and in the temporary duty under instruction accounts end up with those sailors arriving late or not receiving en route training for their applied appropriate assignments in their next sea duty assignment.
Last, just the requirement for a sailor to move from the home port location of a ship or squadron to a schoolhouse not located in that fleet concentration area adds to the PERSTEMPO of the individual for training development during their particular fleet assignments.
Investments in the kinds of technologies that allow us to distribute learning would do two things. It would reduce the PERSTEMPO of the individual in that regard. It would also allow us to keep pace better with the very rapid technological changeouts that go on in the high-technology equipment on deploying units.
The rate of change for our C4I systems in particular is such that we are frequently not able to provide the training to individuals who will operate and maintain that equipment until they are under way. And the distributed learning capabilities that we would like to invest in would allow us to keep pace with those requirements much better than we do today.
Mr. BATEMAN. Thank you.
General.
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General NEWTON. Sir, I think the philosophy which we use in the Air Force is very consistent with the other services in that, certainly, we try to ensure that those operational forces are as far—lean as far forward with readiness as we possibly can, and that will certainly detract with what we are trying to do in the training command.
Since we have moved much of that training that was once in the operational command in 1993, as I mentioned earlier, we moved that to the training command, you have a higher visibility of the cost of that training now as compared to before because it was camouflaged in the operational units. So you just didn't see the dollars that they were putting out. We think this is the right direction to go, because, for one, they can concentrate on the operational mission. I concentrate on the training.
There are certainly some impacts that it is having on us. And we would certainly be the first to step forward and say there are some things that are going unfunded for us. For instance—and we tend to always look at equipment, but this is across the board. Many times we talk about modernization. This is much more than modernizing equipment. We have to modernize the classrooms.
We talked about distance learning. We are into that business as well. We have made a concerted effort to ensure that our airmen came to a classroom for various courses. But now we are relooking to see can we take that out to the airmen through a distance learning process. It takes that up-front cost that was mentioned earlier, and so we are suffering with the same kinds of problem.
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For instance, in our F–16 fleet, I mentioned about the engines and other spare parts. We are certainly seeing our MC rates, our mission capable rates, going down there. If I don't pump pilots and navigators and those kinds of folks out of the door, we don't get them in the operational units, they don't get the experience they have; ultimately, it impacts our readiness.
I will say, though, that we have been looking for innovative ways to help to combat that shortage of experienced folks that we have out there. And so we have—in my command alone, we have used our Reserve Forces to help us in that regard.
I have run two test programs where I use reservists, both Vance Air Force Base in Oklahoma, Columbus Air Force Base in Mississippi, to be instructor pilots in the training business. This is the first time this has ever occurred in the Air Force, and it is working out exceptionally well.
So we have instituted that program. We are looking for the funding to make that happen now in a significant kind of way. We think that is going to help, because you have certainly been seeing and reading about the retention rate which we have been having with our pilots and our navigators going down drastically over the last couple of years here. So that will give us some help.
At the same time, our production rates for pilots are coming up, and that is with the two opposing forces, a large number getting out, a number of them—and an increase in production—certainly puts a stress on the training infrastructure. So we will pay close attention to that.
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In the way of our airmen, again, in areas of those critical skills like traffic control and what have you, those folks, the market out there is very high for them right now. And so we have increased the number of bonuses for folks in critical skills. Just a couple of years ago, that was at 41 career fields. We just reached 88 career fields where we are giving those special bonuses. So we are working the issues. It certainly is having an impact in the training arena.
Mr. BATEMAN. General Rhodes.
General RHODES. Yes, sir. Presently Marine Corps training is coping with the mismatch between requirements and resources for our warfighters today. However, for our warfighters tomorrow, as we see the number of tasks increase, the complexity of those tasks increase, I am not quite so sure, sir.
If I were to look and try to graphically lay out the problem, I would have a triangle. On one side I would have equipment readiness. On the other side I would have our operating forces and tempo. And on the bottom I would have training. In the center would be our operations and maintenance account.
Our equipment is older. We are using it more. Therefore, that line of the triangle is getting larger. Our forces are busier. They are doing more. And they are shrinking. And, therefore, that side of the triangle has gotten larger.
The area that is giving at this point is our operating forces, sir. At the same time, the time that we have, equipment that is old, that is being used more, requires more time to repair it and to fix it. And if we are repairing it and fixing it, and if it is deployed for operational commitments and uses, it is not there for use for training, so that creates a problem.
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Additionally, are the individuals who do our training. Our individual marines who have just come back from two or three deployments that are now on the training infrastructure spend on an average of 100 days and nights a year out on the field.
We have a plan for that, sir. We are working on that. We are looking at the areas where we can best capitalize. One is in the area of what we call marines awaiting training. Our training 9's need a little more streamlining, but because of the session for our initial recruits and so forth, we have some difficulties there. We are looking at restructuring. We are looking at technology for efficiencies. And we are looking at program reviews.
One of the keys we see to this is going to be our distance learning effort. This distance learning effort is designed to improve both the efficiency and the content of our training. It will also return man-years back to the operating forces. Those man-years will be fed back into the manning levels which will also reduce the OPTEMPO of our forces.
Sir, if you were to ask me could I help you, I would say yes, sir, help is with our distance learning. With that said, I have already tried to state that training takes a second seat to our operations forces. And, of course, General Pelak has already testified that we are short on our procurement and some other accounts. But distance learning, yes, sir. Thank you.
Mr. BATEMAN. Thank you General. Mr. Pickett.
Mr. PICKETT. Thank you, Mr. Chairman. I would like to ask each of you, in looking at your training commands, first, are you getting the recruits that you need to keep the pipeline full? Do they have the quality that these recruits had in the past? Are you able to get them processed essentially in the same timeframe that you have in the past?
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Gen. HARTZOG. OK, sir. The number of recruits that come into the training base are adequate. We met our stated goal this last year. There are some problems within it. It is more difficult to recruit some parts of our force than it has been in the past. It was difficult to bring in the number of combat soldiers, and the number of infantry soldiers, in particular, this last year that were necessary. We did that. And the numbers are up in this fiscal year. But it required the bonuses and some different approaches to them than we had had in previous years.
In terms of quality, our soldiers that are coming in today are all what we would call mental categories 1 through 3–A, which are the highest mental categories. They are also all high school graduates, a combination, most of them diploma graduates, some of them GED graduates, some small numbers. We have a very, very small number of category 4 mental quality.
So in broad terms, the answer to are the numbers and quality correct and what we need, the answer is yes.
The second piece of that, though, if you unfold the onion a little bit more, is that we found that we needed more time in the basic training that we had been—than we had been doing to ensure that the recruits left their basic training at the appropriate physical levels, and having gotten all of the tasks and all of the training skills that we felt were necessary to do at the basic training level.
Our basic training had been 8 weeks. In this last year, we have had approved and are in the process of implementing a ninth week of training. The ninth week of training is spread throughout the 9 weeks. It is not a pure additional week. But the majority of it has to do with values, basic values, additional physical training, and some field training that we had taken out of our early training periods.
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So the answer on the basic training business is we felt we needed an additional week to bring soldiers to the right level, and we are putting that in place.
The last piece on the quality that I would mention is—and I don't want to overdraw this but I think we are in a revolutionary new era—and what we ought to be doing is not fighting hard to maintain the dollars and resources necessary to train folks for today's business; but we should be bright enough and smart enough to capitally invest for our future that is considerably different in terms of technology, in terms of the ability to use information, than you or I are comfortable doing.
And this was drawn very clearly to us in this experimental force that we have been working with for 2 years. It will cover twice the ground of today's force, move much faster, have access to quantum quality—quantities, more information than we do today. And it will require leaders particularly to have the facility of how to draw that information and use it.
To give you an example of what that might mean to people in the future is, when we started this experiment 3 years ago, we went to the very best information management folks in the world that we could find. And we asked them what should we expect and how rapidly the computer and the microchip will change our society. And they said, buy hardware every 18 months and be prepared to turn over your software about every year.
In the last 3 years, in the 8-month period in which we were training this experimental force, we have turned over the software five times, completely. And it wasn't because the industry alone had run that rapidly; it was because the young soldiers who have been raised with computer literacy and software and information facility in a way very different from us were playing in that and were demanding that we move forward much more rapidly.
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Now, the good side of that is that it facilitates things like distance learning. It does it easily, because the youth of America today that we are going to count on in 2010 and in the future have the ability to assimilate information more rapidly. They trust symbology. They can see the synchronized parts of this far better than I can at age 56, having been trained on reading printed material and newspaper.
I have tried mightily to beat my 17-year-old son, who is here today, and I don't want to embarrass him, but I have tried mightily for the last 3 weeks to beat him on some computer games, and I haven't come close. I have the feeling I will never come close. It doesn't have to do with the eye-hand coordination. It has to do with the way he has been raised in our educational system and what his abilities and capabilities are for the future.
Now, what does that mean to the training establishment? Well, the general officers of 2025 are in our schools today. The battalion commanders, the command sergeants majors, the other leaders that will lead our force in 2010 are in our schools today and are being formulated.
And we are on the threshold of a revolutionary way of doing business. And instead of capitally investing and preparing for that future by putting a lot of money into distance learning and a lot of money into computer-generated things and a lot of money into training the hands-on business of how to use this technology that is available to us, we are struggling to try to balance the budget today. And are doing it with some effort.
But I think we are about to put a—I, personally, think we are about to put a bubble into this educational system of ours that will take us some years to understand and we may not see until we are all out fishing somewhere.
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Mr. PICKETT. Before the others answer, I just want to—you mentioned that you extended your training program for 1 week. I take it that drove up your costs somewhat.
Gen. HARTZOG. It sure did. It is going to cost us about $8.6 million more to do that this year. And it will cost us about—well, we estimate about 500 people, a combination of civilians and military to do it. And all of those things are things that the Army has funded. And the process will be in place and will begin in late summer of this year.
Mr. PICKETT. OK. Thank you. Admiral.
Admiral TRACEY. Sir, with regard to the numbers, we are achieving the numbers of recruits we require but they are coming in later in the year than they have in the past, as a result of which we are building fairly large backlogs of people as they move between recruit training and their initial skill training, awaiting class-up in those initial skill pipelines.
The quality is outstanding. It is largely high school graduates. It is more than 60 percent upper mental group. There are some internal scores, though, that would indicate that math and reading skills are declining a little bit compared to what they have been in the past, although the aggregate scores are high. But they are different recruits from what we have had in the past.
As General Hartzog has described, they are people who are probably a little bit more technically comfortable than their predecessors were, but they learn differently as well. They learn visually, and they learn in a hands-on mode more than they do in the conventional classroom instructional methods.
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So, to the degree that we are still involved in the conventional classroom method of teaching materials, we are slowing down their ability to absorb materials and we are reducing the level of proficiency they could actually attain in our schools.
The combination of both of those things is what drives us to want to reengineer the way that we do our classroom instruction, and that is more than upgrading the kinds of instructional podiums. It is actually developing course materials that are more visual and engage the student's attention more than the conventional paper materials have in the past.
They are also people who have not the same experiences we have had experienced in the past in meeting and setting—setting and meeting standards. And that is an area that is taking extra attention from us, both in the boot camps and in individual skill training.
Our boot camp average time is growing from 65 days to about 71 days per recruit, although the curriculum length is staying the same. The kinds of special remediation that we offer to students that are having difficulty in various aspects of the boot camp curriculum is being used by more people than it has been in the past. So we are adding about 6 days to the average length of time.
In addition, we have strengthened the military training dimension of the follow-on technical training by adding in a curriculum that continues the sort of structured environment for the—that the student has experienced in boot camp throughout their time in a school in a diminishing rate of control, so that we transition them more smoothly from the very, very rigorous structure, 24-hour-a-day environment of boot camp, to being responsible for individual decisions by the time they leave A School rather than an immediate jump to that at the beginning of A School.
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A School processes are lengthening, not in terms of the time that they are under instruction, but in the time that they are awaiting instruction. Our under-instruction times have actually been reduced fairly successfully by the application of technologies where we have been able to do that. And we are experiencing, where we have been able to do that, a higher level of proficiency of those students who complete those courses taught under the new procedures.
Mr. PICKETT. You have mentioned that you extended the period of time 6 days for your basic training course. Has that driven up your costs of providing this course?
Admiral TRACEY. I should say that we have not formally lengthened the curriculum, because we have a variety of tools that we can target at specific individuals. So the nominal length is still about 65 days, but the average student is taking a little longer. It is costing us about 114 more recruit division commanders, not additional O&M costs appreciably, just the meal cost for people.
Mr. PICKETT. OK. Thank you. General.
General NEWTON. We, too, have been fortunate and been meeting our goals quite well. The quality of individuals that we have been getting have been all high school graduates, 99 percent of those, and we cap it there. That final 1 percent of folks that we can get have GEDs or other kinds of degrees that they have got.
So the Air Force has been doing well, except we do see this trend where the test scores are going down ever so slightly. We don't quite know yet what that means, and I think all of the services are taking a look at this.
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But at my point to what my colleagues have indicated earlier may be a different kind of group, in a different way we need to look at how we get our recruits to come to us. There have certainly been some areas that have been hard for us to recruit in. Most of those have been in those folks that we prepare for special operation, for instance our pararescue and our combat control folks. It has been hard to get those again, just because it is a difficult course to get through.
Back to the individuals that we are looking for, I think we also—I join with General Hartzog and say that we probably need to continue to pay attention to this decline in the interest in military service that we see as we do those various surveys.
Certainly as you draw the force down, there is less contact with the American public. And it is something that I think all of us are going to have to pay attention to. We in the Air Force have been looking at other kinds of programs that begin to touch that public out there: Junior ROTC, Civil Air Patrol. We think that is a very healthy way, not only because it helps to build better citizens for us, but it also exposes them to military service in a very minor but early-on age so that they may be helping to make up their minds.
We have been doing some things in our training that allow us to give to the operational command area a better prepared airman when we get there. That is what we call our mission-ready technology program where not only do we put them through their initial skilled training, but before they get to their operational—let me use a crew chief, for instance—that crew chief, let us say, has been training on F–16's, will go to Luke Air Force Base, launch some aircraft at Luke, which is in my command, in my training command, before they actually get to a full-up operational base.
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So we call that being able to arrive on Monday, producing on Tuesday, just because they have already done it before; and now the operational commanders don't have to go through this process of on-the-job training with them.
We have not done that across the board. We need to complete that with all of our specialties, we feel. That will require another $13 million or so for us to get that done.
We have not increased our basic training, but we really have explored ways in which we can repackage it. And at the end, we want to add in a field training experiment for them as well. And that will be in that last week of basic training for them. That will cost us some initial up-front money, but it will even out as time goes on.
Mr. PICKETT. Have there been any new factors in your basic training program that—I know you said you have not extended the period—but have tended to drive up your cost?
General NEWTON. No, sir. Not at this point. We have not noticed anything at this point that will drive the cost up. We can do it, other than that initial layout that I talked about, and bring on in that initial skills training, that $13 million that we will need to train those folks. That is a bit of TDY to the next duty station, what have you. Other than that, we should be OK.
Mr. PICKETT. I see. General.
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General RHODES. Yes, sir. We in the Marine Corps have been pretty fortunate. We have made our recruiting goals for 32 straight months. As far as the quality, sir, over 98 percent are high school graduates, and over 60 percent are in the upper mental groups.
As far as processing, sir, as you know, our boot camp is 12 weeks long. We lengthened it a little bit over a year ago. What we have got, in addition to some of the problems which have been discussed previously, is that we do not have a level loading of our recruits. We recruit 46 percent of our young American citizens in what we call JJAS, the June, July, August, September period. So that creates very—bubbles in pools as they go through training.
This is where we have one of our difficulties, what we call our marines awaiting training. We are addressing this marines awaiting training in three different ways. First, we are doing various distance learning initiatives, which I have requested and discussed earlier, sir.
Second is we are infusing technology, whenever possible, to make the training more efficient and more relevant.
Third, however, we are doing a complete course review where we are looking at identifying Corps competencies for those specific skills, and we are changing our training to take advantage of what my colleagues have so aptly described as the difference in the new American citizens that we are bringing into the military. We are doing hands-on and field training vice classroom training, and we are getting some efficiencies there.
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So we are meeting them. We are doing better. But we still need some more help in our distance learning, sir.
Mr. PICKETT. How much did you extend your basic training course? You said it was 12 weeks now.
General RHODES. We extended it a week. I guess it was 13 months ago when we did that. We increased, of course, the Corps values, time for the drill instructors [DI], and the introduction of the Crucible, a 54-hour teamwork endurance event which tests the individual recruits mentally, physically, and morally, sir.
Mr. PICKETT. So extending that length has a tendency to drive up the cost a little bit?
General RHODES. It creates the training man-years problem, yes, sir; and that more time is devoted to training, therefore, there is more people tied up into training, therefore less people for the operating forces.
Mr. PICKETT. The reason I have been asking the question about the increasing cost in training each class is that there has been some observation that the cost of training our people hasn't come down as rapidly as the size of the force has come down. And I think this is some of the justification for it, the things that you are telling us here today about why it is you have to spend more dollars in the training process.
Thank you, Mr. Chairman.
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Mr. BATEMAN. Thank you, Mr. Pickett.
Congressman Scott.
Mr. SCOTT. Thank you, Mr. Chairman. Some of the questions you have asked have piqued my interest in the committee I serve on, the Committee on Education and the Workforce. And, just briefly, I wanted to know if there was any coordination between the Secretary of Defense and Secretary of Education to make sure that what we are teaching in high school is appropriate for the kinds of people that you are looking for.
General HARTZOG. I think there are several contacts. I can't speak on the departmental level at the policy level, because I don't work in that level each day. But let me talk about where the rubber meets the road.
And to my right rear, your left front, is a group of very important young folks, because they are, as I mentioned earlier, the folks that will be in this seat in 2025 or perhaps your seats. And they are in the Junior ROTC Program. We run the Junior ROTC Program with retired military folks, noncommissioned officers, and officers who are experienced, dedicated, good. And they work directly in the high school environment, and they are there all day long.
So the qualities of their particular curricula that they teach these young men and women have to meet both the standards of the military through our cadet command and the standards of that particular high school in which they teach. They are, in fact, paid through—partially through the high school business.
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At the senior ROTC level, we have a similar sort of requirement in that our senior instructors live in the—in the college and in the curriculum review process of the respective colleges and have to meet those goals as well as—as the goals of the cadet command.
We have talked a lot about basic and initial entry training today, but the majority of the training that we look at, even though that is very critical and important, the majority of the training that we do is in somewhat higher levels. We do basic entry training for officers and noncommissioned officers. We do advanced training for officers and noncommissioned officers. And I supervise a commanding staff college that trains majors and lieutenant colonels. And we, in fact, train all the way up to and including concerns that are headed off for brigade command.
In each of those institutions, there is a marriage between civilian education and military education. For instance, the commanding staff college offers a master's degree. That is a degree-granting institution. And the Army War College has just this year gotten approval to offer a master's program almost entirely of distance learning mode. In both of those cases, those degree-granting institutions are regulated, reviewed, and worked by the appropriate academic licensing institutions. So I think there is a relatively good deal of impact in terms of formal things.
There is another important marriage, and that is in the distance learning business. We have a backbone of conduits that carry our digits around that we are putting in rapidly in the Army. But as you well know, information is a rather neutral art form. Once the digit goes into the air, a lot of folks can use it.
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So we are seeking marriages with the Reserve component, National Guard particularly, State governments that have similar networks, and academic institutions that have networks. And that allows us to do telemedicine. It allows us to do teletraining of a variety of different sorts. This marriage is important.
A good example of it, we started the teletraining network with our first experiment now 2 years ago in the Sinai, where we have a battalion that is there on guard duty all the time on security duty, and we found that we could buy the satellite or rent the satellite time. We could teach military subjects from 6 in the morning until 5 in the afternoon for those folks who were not on duty.
But to make it worthwhile, from 5 in the afternoon until about midnight, we had to teach college courses and educational courses from a variety of different telenet institutions in the United States. And then from midnight till 6 in the morning, to make maximum use of it, we open the network for family problems, and soldiers could talk to their families and do that sort of work. We have continued that in Bosnia. And we have those kinds of marriages with education. But I don't deal at the policy level, and I am not certain what is happening at that level.
Mr. SCOTT. Let me ask another question. If the others want to comment on that first question when they answer this one, please feel free. Obviously as you prioritize, some things hit a lower priority. To what extent is jointness in training a victim of that priority setting?
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General NEWTON. I think I might be able to answer that one, sir. For us, in conjunction with my other colleagues here, if anything, our jointness training is constantly climbing.
There is a process which we have had in place for years now, several years of which we collectively—as the service departments get together and look at, OK, who can do given training best. So there are a whole host of my training recruits that are on naval stations, on Army posts, places like that. I do the same for them.
For instance, all fire training is basically done at an Air Force station out in Texas; and I do it for all the services there, at least for the Marines and for the Army. So there is a lot of training. Much of—we do a lot of joint pilot training today, and that is climbing force. The Navy does some training for me, for all of my C–130 crews go through Corpus Christi, TX, for instance. So, again, I don't think joint training is falling behind.
Let me go to your first question. Again, I agree. I don't exactly know what is going on at the policy level, but I would anticipate there is certainly dialog. There are a whole host of folks from my command that get involved with educators at the local level, be they my recruits, be they my Junior ROTC instructors. So I think there is a lot of dialog that goes on that shares with the school system what the need might be for individuals that would be coming into the military as well as into industry or what have you.
At the same time, I also get out and talk to a whole host of educators around the Nation about the requirements which we have in the Air Force and how we may be able to partner with them as well as partner with industry in various forms, be that in distance learning or how we may support a given school in a local area with needs that they may have.
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You have to realize, I have a valuable resource of folks, a whole host of folks maybe, even in my dependent force on my bases that can help in communities as well. So we share information back and forth, I think, at the educational level.
Admiral TRACEY. I also don't work up at policy level with regard to the Department of Education. Our relationships with the universities that host our ROTC units and with the high schools that host our NJROTC units are extraordinarily close. And we work continuously on what the educational requirements are for both the high school graduate and for the college graduates.
The demand to establish new NJROTC units is high in every State, so there is a desire for that kind of connectivity with the values and the structure that the units bring. Recruiters, I think, are having, though, an increasing difficulty in getting access to high school. So I suspect that some of those relationships are a little bit less strong than we would like them to be.
Our relationships with community colleges, however, are growing. We are finding that there are increasing numbers of skills or parts of skills that we require for which the community college curriculum is actually a very close match to Navy initial skill training requirements.
In this last year, for example, we recruited a number of x-ray technicians into the Navy who will go to Hospital Corpsman A School, their initial skill training is hospital corpsman, and then not require the follow-on, the specialized skill training in the NEC for x-ray technician, because they bring with them the community college associate's degree in that field. And we expect to do more of that primarily for career-force-level training, because we want the initial skill training to be a continuation of the acculturation process for people new to the Navy.
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General RHODES. Yes, sir. I am not familiar with any type of the formal policy programs going on, but as you have heard here so far, all the services have both formal and informal programs and exchanges. One that we are working on is our college continuing education in which we are offering professional military education [PME] through our distance learning centers. The distance learning centers, somewhat like the Navy, are keyed into some of the community colleges where they actually have their instructors come over and teaching with our courses at night, wherein the individual marine is getting dual credit, both for his professional military education and for his community college credits.
As far as the jointness in training, the Marine Corps, being a small service, satellites an awful lot on the other services as far as their school training. One of the main differences, however, is that all of our Marines attend and complete recruit training and Marine combat training first prior to going to another school's training. So we do not incorporate our recruit training with our follow-on training for skilled MOSs.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Congressman Scott.
General Hartzog made reference to the fact that we have in the audience today a number of members of the Junior ROTC program. We want to welcome them, and we are delighted to have you here. And we appreciate the fact that you are participating in that program, and I am sure will be the beneficiaries of that participation.
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General Hartzog, you made reference in one of your original statements or one of your answers to $200 million in efficiencies that were assumed in your 1999 budget. That brings to mind my having heard in testimony last week before the committee numerous references to assumed efficiencies that are in the 1999 budget and which are going to make your budgets even more difficult to manage if those efficiencies which are assumed cannot indeed be realized.
Do you anticipate that you will have difficulty or find it impossible to—to actually achieve the efficiencies that are being assumed in your various budgets?
General HARTZOG. Yes, sir, is the quick answer. It is—it is difficult. And it becomes more difficult as—as we do this business, because we have been working at efficiencies for several years. And this all sounds like we were a terribly inefficient force when we began this, but I don't think that is the case.
Let me discuss a few of the kinds of things. I guess there are—from our perspective, there are two kinds of efficiencies. One is an efficiency that, if we do something better, it affects the entire Army at large; and that is things like finding prime vendors or single points that can do contracts for mess halls Army-wide at a better rate, those sorts of things. They are the kind of efficiencies that are generally done in Washington by headquarters and whose benefits accrue and are distributed to all the subordinate headquarters.
The second are those things that our installation commanders, who I consider to be the center of gravity for our command, achieve at their own installations. And you will have the opportunity in the second panel to talk with General Ernst, who has been very efficient in all of that at Fort Benning and maintained a—such a quality of life, that he is our—Fort Benning has for 2 years now been selected as our installation of excellence. So he has been very successful at it.
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The specific numbers were that in fiscal year 1998, I needed to produce about $58 million worth of efficiencies. I think we got about 15 million of that from the larger scale things that the Army was able to do and about 45 from the things that we were able to do in-house.
Some of the larger things that are most successful for us so far is we have run several studies about how we run senior ROTC, and we are trying to do it with retirees. And we have some 20 or 30 schools that are involved in that this year. And to date, that has been fairly successful.
We have also involved the Reserve components in new ways. We have taken lessons from our compatriots in the Air Force and the Marine Corps in how to do that. And we have some of the things that are being done now on a repetitive basis by the Reserve components. At the local levels, it has to do primarily with services, with contracts and how we work with the surrounding communities. So I think it is fair to say we get most of our efficiencies at the local level by not being as self-contained as we once were and reaching out and partnering with local communities.
I spent this weekend on one of our posts at the Presidio in Monterey, and I was through what they had done. The local town there had taken over the athletic facilities on the post and had made a capital investment in building athletic facilities.
Now, they happened to be geographically situated that both the town and the post can use them jointly. With a little bit of scheduling effort, it is a marriage that is very good and has saved the military a great deal of money and offered a capability to the town that they wouldn't otherwise have had. So I think we have to move out of Laramie, Fort Dodge mentality and move into Fort Future mentality when we are more open to things like privatization.
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Now the $200 million in 1999 assumes that a lot of the things that we put in place over the last couple of years will come to fruition. All of those things don't come to fruition. And some of it is program slippages. Some of it is continued downsizing. And some of it, I think, both of us who are in leadership positions have to be very careful of—and that is when we take credit for efficiencies.
For instance, we are studying privatization and the post support functions. I think we all would like to assume that that is going to be successful, but we can't take those efficiencies up front and assume that they are going to be successful and then find that they might be successful, but 2 or 3 years later than we had anticipated.
In the interim time, that just exacerbates the drawdown and the budget impact. So we are very careful, at least at our level, on when we take those efficiencies. And we have to have some evidence that it is actual before we do it.
I am hopeful. I am optimistic. We were able to do it in 1998 and have seen the real offsets. The year 1999 is about four times as large. We have a program to do that. Again, I am optimistic and hopeful, but I think some part of it is going to be very tough.
Mr. BATEMAN. Any others?
Admiral TRACEY. Yes, sir. We also anticipate some difficulty in achieving the kinds of efficiencies that have been forecast for two reasons in particular for 1999. We had intended to make some training technology investments in 1998 that would have accelerated the rate at which we could put students through our initial skill pipelines, and some of those have not been able to be made in 1998. So the payoffs we expected to achieve in 1999 will not occur.
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Second, there has been emphasis in the Navy, as in the Army, in seeking privatized or outsourced sources of not just services, but, in our case, some of our instructor positions were to be outsourced. We find that the military preparation of A school students, initial skill pipeline students who are receiving privatized instruction, is not as good as that of students who have sailors on the podium.
So we are reversing some of those plans and putting sailors back on the podiums in our A schools, which means that we will push the privatizing and outsourcing objectives to some of the training support and the base operations support functions, and we will have to achieve those kinds of efficiencies there.
Mr. BATEMAN. General.
General NEWTON. The year 1999 doesn't affect me directly in my command directly near as much as it probably does in some of the outyears. We in the Air Force have laid into that many of those outyear budget efficiencies that are there. And I join my colleagues in saying that even though, in my command, we have done quite a bit of outsourcing and privatization over the years, in other words, we have contracted out aircraft maintenance, those kinds of things in the training business, those things that we know will not be taken to combat with us and have been very successful with that, in doing so we have found we have been able to get an efficiency of some 25 to 30 percent when we do so. So as we look at that for the outyears, we think we can make those things happen. But I caution the leadership when I am talking to them that this was just one command, and the Air Force may be doing it and the other services at some lower scale.
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Now, as all of us ramp up at the same time to try to make this happen, we may find some difficulties as we move into the outyears. So I think we have to take a very cautious step there.
We tend to learn from each other. In other words, Admiral Tracey and myself have shared the information about not going too fast with reference to platform instructors, those kinds of things. We will continue to share that knowledge across the services and try not—and take those lessons learned and try not to make some of the same mistakes.
Mr. BATEMAN. General Rhodes.
General RHODES. Yes, sir. I think all of us have made the mistake of counting efficiencies before we realized them. In the Marine Corps, we basically are looking at three different ways in gaining efficiencies in training. First is through course restructuring. An example of that would be what we do with our Marine combat training where we reduced the course length from 24 to 17 days.
Now one would ask, well, what type of product are you getting? Well, what we have done is take advantage of the way our new recruits are learning. At day one, they draw their gear, and they are in the field 24 hours a day for the first 13 days. So they are immersed in it. They are actually given more training time and more hands-on time, and it is scenario-based. So that is one way in which we are getting some training efficiencies.
A second way is through technology infusion. A case in that would be—an example would be our Lab-Volt, where at our Marine Computers and Electronics School at 29 Palms wherein we have technical training aids, a multimedia approach, where there is actual trial by error, hands-on, where our marines are learning much quicker than they did in the old method.
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The third, however, is the distance learning. And on that one, sir, we have got a pilot program going from 1998 and 1999, and we are not claiming any efficiencies. We have some programmed, but they don't even start until fiscal year 2001, until after we can get a pretty good handle on what we think we are going to gain, sir.
Mr. BATEMAN. Thank you all.
General HARTZOG. Sir, may I add a quick comment?
Mr. BATEMAN. Certainly.
General HARTZOG. This has to do with flexibility of how you manage resources. In the $2.7 billion budget that I have this year, we have about 800 million of it that are fenced moneys. The degree of fencing has grown each of the 3 years I have been the commander here.
In general terms, what that does to an installation commander who we hold responsible for managing this at that rubber-meets-the-road level is that he or she has two pots of money to work with, the money that has to do with training, and the money that has to do with quality of life or post support. And in the cutting edge of the Army, where the installations are predominantly deployable forces, traditionally our commanders migrate moneys during the budget year, and they migrate it from the training to post support side because their training at unit level is flexible. They have control over by month, from month to month and quarter to quarter.
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In the institutional Army, ours migrates the other way. When I have to migrate money during a budget year, it traditionally goes from post support to the training side because we cut most of the contracts at the beginning of the year. When we turn the lights on in this building, it is a sunk cost, and I can establish that at the beginning of the year. And to get the best and most efficient contract deal, you try to put it in the front end. That reduces our flexibility.
So I would request and urge, to the extent that we can, that we trust our lowest levels in this business to manage that migration and put as few fences on programs as we possibly can.
Mr. BATEMAN. Well, you mentioned that word migration of funds, which has become a very often repeated phrase in our hearings in Washington. Have you experienced—and it certainly comes up in the context of the supplemental appropriation that has been asked for for the Department of Defense—have you experienced a migration of funds from your commands in order to finance the ongoing contingency operations in Bosnia or other areas?
Admiral TRACEY. Not yet, sir, in the Navy. However, if the supplement is not funded, I would expect that I will end up having to migrate funds out of training.
Mr. BATEMAN. What would the affect of the supplemental appropriation being offset by reductions in the defense budget do to you?
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General HARTZOG. That means, sir, that DOD would be paying for the funding offsets. Boy, at the end of the fiscal year, this year, that would put the last quarter in danger. I think that would be in the neighborhood of 35 to 50 million for us of potential problems. And the problems would certainly be, since I migrate backwards from the rest of our force, for our force it would be probably cancelling all the maintenance and repair activities at the end of the year. And that is things like storm damage and barracks. We just have to let it sit for a while.
We wouldn't replenish our spare parts stocks. We would live off of whatever we had and push that to 1999, I suspect. I would have to look at the number of training rotations or the support of training rotations at the National Training Center and the battle command training program, that is our senior officer developmental programs, to see if I could fund out the rest of that year. And there isn't that much flexibility in the civilian work force, but you would have to look at some things like furloughs or the other techniques that we have within the force to see if you could finish out the year. It would be tough.
General NEWTON. I would join with my colleague on the last part he talked about. Again, I think each of us would look at things that are available to us and see how you can delay something, but I would suggest that we have been doing that now over the last couple of years as well.
But the point I really want to make is that really does take a toll on the troops, because they see that you are going to make this up on the backs of their effort. And that disturbs us when—we as commanders out here. So it certainly would have a very significant impact.
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One other point, if I could circle back to it for just a moment, the question was asked about that we brought the force down, but you don't see a corresponding course of movement with reference to the cost of training. A few things that I might suggest that may be happening here, maybe not totally, as I mentioned earlier, in the Air Force, we certainly move some training into my command, so it is much more visible than it has been before. That is one.
But on the other hand, there is a certain cost of doing business as well. So some of that is there. So I wouldn't expect that it would come down proportionally to the number of troops that we draw down if we could just keep those in mind.
Thank you, sir.
Mr. BATEMAN. I think that point is well made.
Yes, sir.
General RHODES. Yes, sir, if I could just for a second. We have talked about, and we have all seen it before, do the mission, capture costs, submit the costs, and perhaps we will get a supplemental. That causes a couple of, of course, problems.
Number one, though, we haven't addressed is lost opportunity. We are paying for that out of our O&M for the total force. So there is a definite lost opportunity because that funding has gone that time will not allow us to make up because the supplemental does not come at a time at the initial portions when we give up that money.
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The second would be that, quite frequently, then, to make it up, it comes back to us as a tax. We have all worked very hard, just as you have, on building a budget to make efficiencies, sometimes a building block, sometimes a procedural. And when it comes time, then, to go ahead and identify where to take the tax, it is going to interfere with the efficiencies and the building block and the procedural effort that we have gone through to make up the budget, sir.
Mr. BATEMAN. Well, I thank you all. I think I speak for all of the Members who are here today that it would be very much our hope that you get quick approval on the supplemental appropriation from the Department of Defense, and it would not be required to be offset and taken out of the hide of the Defense Department budget for fiscal year 1998.
I think we understand the degree of difficulty and turbulence that would create if you were forced to do that, especially as you move later into the fiscal year in which you are trying to manage your programs and your funding.
I also would comment that I am very much aware from my hearings last week that all of the services are experiencing in the fiscal year 1999 budget submission a significant underfunding of recognized backlog of base operations support, real property measurements accounts that are being funded at something like 65 to 70 percent at best of the recognized requirements. And that was the way it was done in 1998. That was the way it was done in 1997.
And certainly there comes a time when you can't continue to defer your base operating support, your maintenance of your real property, your equipment that is wearing out. We are aware it is almost eating our lunch because it has become so expensive to operate equipment that probably should have been scrapped and replaced; but instead of doing that, for lack of the capital investment, modernization funds, we are stretching equipment longer and longer and longer, and it is costing more and more and more just to maintain it.
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So we are very much aware of the problems that are out there, and I am speaking certainly for myself. I would like to see some of those problems go away by a more realistic level of funding for our defense efforts.
Mr. Pickett, Mr. Scott, do you have further questions of this panel?
Mr. PICKETT. I have nothing further.
Mr. BATEMAN. We may have some questions from Members or staff that would be submitted to you for response on the record. So we will keep the record open for that purpose.
[The information referred to can be found in the appendix on page 1007.]
Mr. BATEMAN. But with that, we thank you very much for being here and for your testimony this morning. And certainly we appreciate you, and we appreciate the men and women of the services that you lead. We share in the views expressed in the Harris poll that the people in our military represent the finest aspects of American life in our society today, and we are indeed proud of you. Thank you again.
We will recess for 5 minutes; then we will hear from our second panel.
[Recess.]
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Mr. BATEMAN. The subcommittee will come to order.
Let me welcome our second panel, which consists of Maj. Gen. Carl Ernst, commanding general, U.S. Army Infantry School, Fort Benning, GA; Rear Adm. Toney M. Bucchi, Chief of Naval Air Training, Department of the Navy; Maj. Gen. Andrew J. Pelak, Jr., commander, Second Air Force, Department of the Air Force; and Brig. Gen. Keith T. Holcomb, Director, Training and Education Division, Marine Corps Combat Development Command, Quantico, VA.
We are very pleased to have you with us. And General Ernst, you may proceed, if you will.
STATEMENT OF MAJ. GEN. CARL ERNST, COMMANDING GENERAL, U.S. ARMY INFANTRY SCHOOL, FT. BENNING, GEORGIA
General ERNST. Mr. Chairman, members of the committee, thank you very much for allowing me the opportunity to represent Fort Benning, GA, and the folks that I have the privilege of serving with down there.
General Hartzog talked about the role of TRADOC. Within that, I have three roles or functions that I have at Fort Benning, GA. I am the commandant of the infantry school; I am the commanding general at Fort Benning; and also the chief of the infantry, which means that I have to look at the needs of the infantry worldwide. And I would like to address you, gentlemen, from all three perspectives.
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First of all, a little bit about Fort Benning: Fort Benning, GA is located adjacent to Columbus, GA, and Phoenix City, AL. We actually sit astride the Chattahoochee River. We are located in both Georgia and Alabama. We have installations in north Georgia for the mountain ranger camp and Eglin Air Force Base, FL, for the Florida ranger camp, here, in three States, and about seven counties.
The population we serve is about 103,000, 22,000 military, about 23,500 family members, about 7,000 civilian employees, that is both the Department of Army civilians and nonappropriated fund employees. And we support about another 52,000 to 55,000 military retirees who call Fort Benning their home.
We have the largest of General Hartzog's schools. We have about 47,000 students a year. And we are involved in all aspects of the TRADOC mission.
From an OPTEMPO standpoint, we are the busiest of the TRADOC system. We train 50 weeks a year, 7 days a week. Last year, we trained 51 weeks of the year because of the Bosnia deployment training.
In the mission to prepare the Army for war, we teach—we do training and education, and we do all of the developmental work on the architectural side of the TRADOC mission. In addition to that, we are also the third largest post in the Army because we have a lot of Tenant units. The Tenant units are also, not only in my TRADOC school, I have TRADOC Tenant at my installation, the U.S. Army School of the Americas, which is a benchmark institution. We believe in human rights training and engagement and enlargement with Latin America. The Army's physical fitness school is also located at Fort Benning, GA.
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We have Special Operations Command, U.S. Army. Special Operations Command is represented at Fort Benning by the 75th ranger replacement in its 3d Battalion. That is the operational rangers. In Forces Command, we have a 3d Brigade at a 3d Infantry Division, 36th Engineer Group. And we are also the overseas replacement center for Forces Command. And it is also a joint activity, because we represent Atlantic Command [ACOM] in that regard and, in fact, have deployed 27,000 soldiers, sailors, airmen, marines through Fort Benning one way or the other to the operation in Bosnia.
We have Medical Command [MEDCOM], represented by a medium-sized Army hospital, noted last year, it was the best of its size, and a series of dental clinics. The Department of the Army is represented there with the Army Marksmanship Unit, which are upper military and Olympic champion shooters.
We are blessed—Representative Scott, you asked about education. We have our own—an on-post school system, DODDS school, seven schools, about 10,000 children through—from preschool through the eighth grade. Incidentally, all used computers. They are on the Internet, including the preschool.
Readiness, we report through the installation status report, TRADOC status report, and unit status reports because of the nature of the units we have here. So we are, in effect, a salami slicer, if you will, of the U.S. Army.
In the infantry school, we are the proponent. And as the proponent, you do all the things General Hartzog talked about in his TRADOC role. In the infantry, we have five types of infantry which we are responsible for: Airborne, air assault, light, mechanized, and ranger.
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We are a proponent for the soldier as a system. That means every individual soldier in the Army, what they wear, carry, or consume, we are the proponent for that. Proponent for small arms basic combat training program of instruction is our responsibility.
We have the dismounted battlespace battle lab, the contingency and forcible entry battle lab at Fort Benning. We are a proponent for the Bradley fighting vehicles, antiarmor weapons, directed energy, urban, jungle, mountain combat, and a host of other operations in special environments. We also teach all those things at Fort Benning.
In the one station unit training business, which is basic combat training [BCT] and advanced individual training [AIT], one station unit training [OSUT] is both basic combat training and advanced individual training put into one organization for the entire period of time. We train—we will have trained 19,000 new infantrymen this year.
Incidentally, the quality of those youngsters is superb; 69 percent of them are in the upper mental categories. All are high school graduates or GED equivalency. We are doing very well in that regard. Not without some cost, because it—the Army last year, I couldn't have said that. It has taken a very generous enlistment bonus.
And, incidentally, on the reenlistment side, a very generous reenlistment bonus for the infantry. And it has turned a tide. Last year, in the aggregate, we were at 86 percent strength about a year ago. Today, we are at 94 percent strength in the aggregate infantry and going up through high quality and enlistment.
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That course is a 13-week course. It is tough and rigorous. When those youngsters graduate, they are infantrymen to their heart and soul. They are fit, ready. They will go forward with rifle and banner. They will go down ropes in Mogadishu if we ask them, just as they have done for 223 years. We have—are at one of three TRADOC drill sergeant schools. And we have 330 drill sergeants. So it is magnificent noncommissioned officers at Fort Benning, GA. We have a Noncommissioned Officer Academy with three NCO courses. All infantry come to Fort Benning in the ranks of E–5, 6, and 7 for their formal education of infantry noncommissioned officers. We are also the Army's officer candidate school [OCS]. We commission about 400 or 500 officers a year in all branches. About a third of that category are National Guard personnel through an agreement with the Army National Guard. This year, we will run phase three of the Army National Guard OCS at Fort Benning, GA.
In officer education, we have courses for lieutenants, captains; and all battalion and brigade commanders of infantry come to Fort Benning, GA. The airborne school is at Fort Benning. We train 14,000 paratroopers a year, including about a thousand from the U.S. Air Force, U.S. Navy, and U.S. Marine Corps to meet their airborne requirements. We also have ranger school at Fort Benning and about 25 to 30 functional or specialty courses such as sniper, Bradley, master gunner, long-range reconnaissance operations, and pathfinder.
The School of Americas training is 12,000 Latin American students from noncommissioned officers to field grade officers and, what I have already said, is a hallmark institution.
We also touched the National Guard through 11 Army National Guard teaching battalions in the Army, total Army school system, and that includes significant impact and distance learning. We do—we assist them. We accredit them. We certify them.
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Incidentally, all of our training development at Fort Benning, GA, the chief of that is an Army National Guard officer who helps us do training development for total army school system [TASS], an alternate Fort Benning training development.
On the developmental side, we do combat developments, doctrine developments, training developments, and training and exercise support for all proponent areas, including about 582 combat development programs, dismounted battlespace battle lab, and forcible entry lab; manage five admiral concept technology demonstruction [ACTD's], including military operations in urban terrain [MOUT] and division tactual operations [DTO], small unit operations, program contingency and light advanced warfighting experiment [AWE] upcoming, which will be joint. And most of those, by the way, we are partners with the U.S. Marine Corps in the areas that we are looking at.
Now, as the CG at Fort Benning, I mentioned a third brigade, 3d infantry Division. It is an 18th Airborne Corps Division Ready Brigade Unit. It has an 18-hour wheels up requirement when it is on ready status. The 75th Ranger replacement in its 3d Battalion, when they are on ready status, they have a 9 hours wheels up town. And all these units, incidentally, have deployed to most of our recent operations.
Lawson Army Airfield can land any aircraft and can stage seven C–5s for deployment purposes. The 36th Engineer Group, which participated in Panama, Desert Shield and Storm, Somalia, Hurricane Andrew, now has a company in Hungary and a company in Bosnia.
In our overseas replacement mission for both forces command and joint—and ACOM, as I mentioned, 27,000 soldiers from all three components of the U.S. Army and all services. And so far it is just information and good news.
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Let me talk a little bit about life in the street at Fort Benning. When we talk about BASOPS, that equals quality of life, but it also equals training support, because you can't separate running rangers and getting students to and from training from BASOPS. They are one and the same at Fort Benning, GA.
TRADOC has had to move money. General Hartzog talked about this, over the last few years, unlike other places, where training goes to BASOPS, training resources in terms of dollars go to BASOPS. In TRADOC, it goes the other direction. BASOPS' dollars go to training because you can't—at Fort Benning, we cannot defer training. Students show up; we have to train them. And training is our most important daily priority. We have to get that right, because our students are gone at the end of the program of instruction [POI] period.
When you add to these BASOPS cuts, you have got to especially look at the civilian cuts. In many ways, we have mortgaged BASOPS with more or worse to follow. It has an obvious quality of life impact. It is more than quality of life. BASOPS, as I said, is training support. Today, we have drill sergeants that have to drive trucks and buses, take soldiers to sick call, because we don't have the BASOPS support, the training support to do that.
One station unit training [OSUT] soldiers supervised by drill sergeants, they pull KP plus or minus about 5 days during an average POI of 13 weeks. So we lose about 5 days of training time per trainee on an average 13-week cycle. But that is not all—it is not all lost, because the drill sergeants make that up on Sunday afternoons. Otherwise, it would be a 6 1/2-day week. So we could make it, in that case, make it a 7-day week.
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Units do range maintenance. In essence, our units have adopted ranges, which means that you have got sergeants and troopers out there doing things that we should be doing with training support, apparatus, or BASOPS personnel.
In the early 1980's, we cut military to convert to civilian and then along came the late 1980's. We then started cutting the civilians. So we—it has been a net lose/lose. At Fort Benning, GA, by the end of this coming year, we will have undergone 18 RIF's in 14 years, 3,450 Department of the Army civilians for 40 percent overall cut. In 1990, one of my predecessors told the Department at that time it was—that was the last cut that Fort Benning could absorb. I wish it had been.
Facilities: There is a lot of great news at Fort Benning. If you came to Fort Benning today, you would be impressed with the construction that is going on, not just construction of barracks. We have got new barracks, and we have got major renovation of the 1950's era so-called hammerhead barracks. That is great news. But if you stopped and you looked around, and say what is wrong with the picture, it is all in the table of organizational equipment [TOE] units. It is all in the go-to-war units. That is not General Hartzog's barracks, nor is it the barracks that belong to the infantry school.
So what we are going to end up with at Fort Benning, GA, are haves and have-nots. You are going to end up with some troops in great barracks, state of the art in terms of living conditions, and other students that are in places that you would not take—want to take the parents on their trainee/parent day.
Now, 30 percent of our barracks are in the red. You asked about backlog of maintenance and repair. It is $182 million for barracks at Fort Benning; $69 million for Army family housing; and at the rate of resourcing, we won't be able to sustain the level of transgression into red.
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The good news is we have demolished 1.3 million square feet of obsolete buildings at Fort Benning for a cost avoidance of $3.4 million.
BASOPS dollars to training, I mentioned that migration in TRADOC, that is unique. But that is not the only migration. Because to backfill the BASOPS to training, we have to take non-appropriated funds [NAF] to do some maintenance and repair of some facilities that should be done by appropriated funds in terms of gyms, child care centers, and also—oh, by the way, to buy the gym equipment, we are using NAF money.
The Department, in our logistics, our logistics apparatus at Fort Benning is not only on the TRADOC side. It is also the back-up DS and the GS maintenance for the 3d Brigade, the 3d Infantry Division, the 36th Engineer Group, and the Rangers. It is the same outfit that has to get those folks out of town on time every time. That is 9 hours for the Rangers, 18 hours for the 3d Brigade.
They are in 50- to 60-year-old facilities with a greatly reduced civilian work force. And, in addition, we talk about efficiencies. As we look at contracting out Alpha 76, that is mostly BASOPS. As you know, that is DOLDPW, as we see that. When you look at the funding for that, when the contract, assuming the contract comes in place, we may be looking at a gap of at least a year if we are lucky, maybe 2 years, where we will have insufficient personnel to handle business at Fort Benning before the contractor shows up.
Training: On the TRADOC side of the account, we are authorized 42 percent of our required majors, 52 percent of our required captains, which means, on our best day, if everybody shows up, it is a sign, we will be about half strength in those two ranks at Fort Benning on our best day.
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In addition to that, we send officers, noncommissioned officers on long-term TDY's to backfill operations in Bosnia, Eastern Europe, Kuwait, and other places. On average, a quick snapshot, which is about the average, we have one lieutenant colonel, four majors, and five captains on 179-day TDY to other places.
Borrowed military manpower and tasking is going up. Obviously, as resources come down, we tap the units to do more and more on post.
Reduction in flying hours, like the rest of the Army, we are the proponent for Army air assault operations. Not only have we lost aircraft to do that, we have lost flying hours. And so we have courses in which we are probably not doing well enough in teaching air assault operations.
Our combat development was cut from 138 7 years ago to 31 personnel. In the meantime, the programs watches went from 350 to 582. That is—that is a snapshot.
As Chief of Infantry, a lot of talk about operations other than war, announced the building support operations, and I know there is a lot of dialog about should we be doing it and so forth for the United States. Infantry, 223 years, we have been on frontier duty or expeditionary duty somewhere. That is not new to us. We think it is—it is in our history. And we think it will always be in our history. It is a—the problem we think is that there is a cost in that.
There are six Infantry battalions deployed away from home station today, and they have been for months. That is an 18-battalion equivalent by the time you prepare for deployment, like a Bosnia or security duty into Sinai, to recovering from that. It takes about a year for a 6-month deployment. So those 6 battalions equal 18 battalions out of the warfighting queue for the Infantry. That is not just peculiar to the Infantry, by the way.
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In the Infantry worldwide, over the last few years, we have taken reductions in ammunition. Some of this is offset by technology, but 22 to 41 percent reduction in live fire capability in terms of our ammunition account across the Infantry.
Force structure: In addition to the downsizing, loss of Infantry battalions, with the loss of the numbers of divisions from 18 to 10, inside that structure, we have also lost some Infantry capability in terms of companies' long-range reconnaissance and dedicated antitank are two of those.
Just in the way of summary conclusion, we noted off the top when talking about Korea and what happened to the U.S. Army in the early days of Korea, I made the comment that, sooner or later, you have got to put your young men in the mud. I would submit to you that, for 223 years, we put out our young men, young women into the mud. We are still doing it.
It is a readiness versus modernization procurement dilemma. That is the reason that you gentlemen are here. And it is, simply stated in grunt speak, since we are the home of grunt, it is—the dilemma is now versus future. We think that the most important part of the future are the people. It is those youngsters that General Hartzog talked about. That is where we really need to keep our eye, in my view, always on that equation, because you have got to grow them, and you have got to keep them. And you do that, Carl Ernst's view, training. And it is challenging and tough.
The quality of life, and nowadays that includes quality of family life. You have got to train and deploy them on great equipment. They don't want to train on equipment that is substandard, because they know they are going to fight on that same equipment. And you have got to have the pay and benefits.
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And, oh, by the way, that includes our civilian employees, because we have already started to eat seed corn. I think we have consumed most of the seed corn in my civilian work force.
And we have got to make sure we keep an eye on our alumni, our retirees, all of which—all of which believe that we are perhaps walking away from that. That is how we keep great soldiers and families.
We sometimes get asked about being sound businessmen. Be more businesslike. Unfortunately, given our size and resources, business is so damn good that it is slowly choking us. Gentlemen, thank you for your attention this morning.
[The prepared statement of General Ernst can be found in the appendix on page 959.]
Mr. BATEMAN. Thank you very much, General Ernst. We certainly recognize the fact that, to use that often used expression these days, you have been doing a great job with less and less. And we are very, very disturbed that we are continuing to ask you and your colleagues in the services to continue doing that. There is going to be a payback for having made those kind of demands on you.
At this time, we would look forward to hearing from Admiral Bucchi.
STATEMENT OF REAR ADM. TONEY M. BUCCHI, CHIEF OF NAVAL AIR TRAINING, DEPARTMENT OF THE NAVY
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Admiral BUCCHI. Thank you. Mr. Chairman, distinguished members of the subcommittee, it is a pleasure for me to be here today to talk about Naval Air Training Command readiness issues and how it affects the readiness in the fleet. I would like to do it by focusing my remarks on basically two things.
I would like to give you a quick overview of, not only the size, but also the tempo in which the training command operates, and then talk to you about how we measure readiness in the training command, which is somewhat different than what is used in the fleet. And in that, we will see it is not just roses, it is not everything that we would like to have it, but we are trying to show you where we have a handle and where we do not.
Very quickly, the training command consists of 16 training squadrons. They are structured under five different training wings. They are located at five different naval air stations. And we have them located in three of our States. We train, not only the Navy, but Marine Corps, Coast Guard, and Air Force students.
And I would like to kind of add on to what General Newton mentioned this morning in response to one of the earlier questions. Our joint program is very robust. It is growing. I would tell you that, if we can't do it right today, then something is wrong.
One of my dearest friends is my counterpart at the 19th Air Force. I was his deputy during joint task force [JTF] squad. So Maj. Kurt Anderson and myself surely can get our joint program together. It is doing very, very well.
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In addition to training our own students here in the United States, we have 10 different nations that we are providing instruction for their students under the foreign military sales program.
Our instructors are operating a quite high tempo. We are flying one-third of the Navy's entire Flying R Program. Last year, we flew over 360,000 hours. We will fly more this year. We are working our people anywhere from 6 to 7 days a week. They are working 10- to 12-hour days. They are routinely flying in excess of 50 hours a month. And although those young instructors might not complain about flying those hours, I would tell you that we are working our people exceptionally hard. So the tempo is up.
Probably one of the best ways to describe to you what the training command does is to kind of go back to my DOG group days as a DOG group commander. We just saw a carrier get underway. And we all understand how a carrier goes into the wind to launch and recover its aircraft. And I would tell you nearly 365 days a year, the training command is into the wind. We stay in the wind. And we launch and recover those airplanes. And we take about a 2-week standdown period is about all we take throughout the year. So it is quite big. It is quite robust. And we are working on people exceptionally hard.
Now, as I turn to the readiness and how we measure the readiness, it is not with the Status of Readiness and Training System in the SORTS that you are familiar with in the operational role. We measure our ability to meet the readiness standard with three things.
First is the quality of our aviators, the new aviators that we pin the wings on. And I would like to pause here just for a second and tell you there is absolutely no doubt in my mind that the quality of the young men and women that we pin those wings on today, whether it be Navy, Marine Corps, Coast Guard, or Air Force, that they are very, very top quality people. You would be around them, you are proud to be an American, and you are not competing against those youngsters, because they are very, very high in quality.
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The second thing we measure our readiness on is going to our ability to produce the numbers to the training rates that we are given that are really truly based on the first sea/shore rotation sequence.
The third thing that we are graded on or looked at is our ability to time—train on the time line as given in the CNO syllabus.
I would tell you that my second checkmark and my third check mark is not as good as my first checkmark. I would also tell you that I would always sacrifice number two and number three to make sure I always have quality. That is the number one priority.
You may wonder why I said that No. 2 and No. 3 is not as high. We have had problems last year. It is again this year, with one of our training aircraft. It went down for a period of about 4 to 5 months. We did not get it to quite the number accessions for the naval flight officers [NFO's] that we would like to have had.
So we did not make the numbers last year, which will have an effect eventually on the fleet. Our time to train is not within the guidelines that the CNO would like to have us have.
I would tell you that the good news of that piece is that we understand what our problem is. We understand it is unacceptable. It has my top priority. It has the CNO's interest. Everyone between the CNO and myself is dedicated to making the time line work. And I would tell you that my wing commanders and squadron commanders understand it, and they, too, are striving to make it happen.
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There is one key element into those three pieces of my readiness that will affect the fleet, and that is resources. And when I talk about resources, I am very specifically talking about the right number of instructors, both pilots and radar intercept officer [RIO's], or NFO's. I am talking about sufficient numbers of aircraft ready for training. I am talking about having the correct number of accessions into the pipeline. And I am talking about the Flying R Program be funded properly.
So I would tell you that it is resources in one word, but I will go one step further and tell you that it is really truly balanced resources. It is a very delicate balancing process. If one of those is out of kilter, then it is asking for a train wreck. I would tell you that the problems we have had in the past has been exactly that. We have had some resources, but they were not balanced.
But I would go one step further and ask you for your support in helping us maintain the constant sustainability piece of the balanced resources, because that would be the key to being able to produce quality aviators, the numbers of aviators that are required, and produce them in time.
I thank you for your support, for your enthusiasm, and for your concern with our readiness. And I look forward to answering your questions, sir.
[The prepared statement of Admiral Bucchi can be found in the appendix on page 973.]
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Mr. BATEMAN. Thank you, Admiral Bucchi.
Next, we are pleased to hear from Maj. Gen. Andrew J. Pelak, Jr., commander, Second Air Force, Department of Air Force.
STATEMENT OF MAJ. GEN. ANDREW J. PELAK, JR., COMMANDER, SECOND AIR FORCE, DEPARTMENT OF THE AIR FORCE
General PELAK. Thank you, Mr. Chairman. I appreciate the opportunity to talk with you and your distinguished panel members today about Air Force training and readiness.
As commander of 2d Air Force, I am responsible for all nonflying training programs conducted by the Air Force. My command is comprised of four training wings, a training group, and 78 field detachments in operating locations around the country.
Our 20,000 trained professionals train over 170,000 graduates annually. Our primary mission is to provide mission ready airmen to operational commands who support the joint warfighters.
Our great graduates are, for the most part, worldwide deployable. That means they are exposed to real-world contingencies less than a year after graduation.
In the early 1990's, our field commanders' greatest concerns were that they were doing too much training. And this commitment was taking away from their primary job of carrying out operations.
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As a result, in 1993, the Air Force brought all initial skill training into its training command and charged it to produce the mission ready airmen force providers.
Initial technical and skills development are now standardized Air Force-wide. And mid-level career NCO's are returning to the schoolhouse for refresher training prior to advancing in grade. This exposed them to the most current procedures and techniques in their specialties.
Each year during the budget cycle, the question arises why do training costs appear to keep going up when the force structure is going down. For the Air Force, the answer lies partially in the restructuring, which moved the training and resources previously performed and absorbed out of field commanders operating budgets into the newly formed air education and training command.
This consolidation increased the operating costs of our training command, but, in reality, training costs were reduced throughout the Air Force through greater efficiency, improved standardization, better mission-ready graduates, and an overall reduction in training and infrastructure.
The increased operations tempo throughout the world has had an affect on our ability to train. We find more and more of our trainers are being pulled away from their primary training duties to perform the duties left behind by those deployed.
In addition, deployments and contingencies pull operational equipment used for training in peacetime away from the schoolhouses. The greatest impact on operational commands, though, is they have less people to release for deployed personnel for specialty and technical training, and less capable to train in the field. This impacts both the individual airmen who falls behind in his career progression and the operational readiness of the warfighting commands.
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We also find in this time of limited resources that the deployments in real world contingencies siphon away valuable resources, impacting our ability to fully execute our training programs.
While it is my view we have the best training programs in the world, we routinely struggle to get our fair share of the operating budget. To offset this, we leverage every dollar by constantly seeking ways to improve our business practices, to reduce costs, create efficiencies, manage more effectively, and use the newest technologies to improve and enhance our training.
While all commanders believe training is essential to mission success and readiness, the reality is that, all too often, it is treated as an overhead or infrastructure cost, and it doesn't get the appropriate funding priority.
Mr. Chairman, training is a force sustainer and multiplier and is essential to wartime readiness. If we unrealistically constrain our investment here, we risk failure where we can least afford to do it, and that is in combat.
Mr. Chairman, thank you for the opportunity to speak with you. I am looking forward to answering your questions.
[The prepared statement of General Pelak can be found in the appendix on page 985.]
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Mr. BATEMAN. Thank you, General Pelak. Each of you have submitted written statements for the record, and they will be made a part of the record in their entirety.
And now we are pleased to hear from General Holcomb.
STATEMENT OF BRIG. GEN. KEITH T. HOLCOMB, DIRECTOR, TRAINING AND EDUCATION DIVISION, MARINE CORPS COMBAT DEVELOPMENT COMMAND, QUANTICO, VIRGINIA
General HOLCOMB. Good morning, Mr. Chairman. Thank you for the opportunity to appear before you and your distinguished members.
I want to begin by emphasizing that our training continuum is strong and is providing the ready members that our operational force commanders need and expect. With that said, I would say that the four components of our training continuum: Recruit training, Marine combat training, individual skill training, and unit training, are in varying degrees of readiness. I would say that our recruit training and our Marine combat training is very strong, and we see a bright future there. It is adequately resourced.
I would say, as you have heard described this morning by General Rhodes, that our individual skill training can do with some improvement. We have found some inefficiency, and there are some places where we can improve it. We think we may be able to take as many as 5,000 manyears over the fit up out of that individual training pipeline and put it back into the operational forces where that will improve manning levels and reduce PERSTEMPO and OPTEMPO that is out there.
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And as you have heard described, we see three ways of being able to do that. First and foremost, we are looking at each one of those courses that is out there, and we are looking to restructure and to focus in on the corps competencies.
This isn't to say that something has been done wrong in the past. To the contrary, what we are seeking here is relevance, relevance for the kind of marine that we are bringing in the Marine Corps today, and relevance for that operational environment that we are going to be preparing that Marine for. So the first piece there is corps competencies.
The second piece is distance learning. And as you have heard described, the Marine Corps now has a distance program. That wasn't true a couple years ago. It is now as part of our POM [program objective memorandum] 2000 initiative. And we have a pilot program that we have used some monies on our own to start-up this year and begin testing.
Frankly, we need to move that forward. Our sister services here have had programs. They are leaning forward. And we, as a service that depends on them for 62 percent of our MOS's need to get in step and get caught up.
And the third piece is, sir, that we need to take a look at our training management system. We need to do a better job of managing the way that we flow Marines through our training pipeline so that we don't have the inefficiency of a Marine awaiting a school seat.
Thank you very much for the opportunity to appear before you, sir.
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[The prepared statement of General Holcomb can be found in the appendix on page 995.]
Mr. BATEMAN. Thank you, General Holcomb. I thank all the members of the panel.
General Ernst, in your written statement, there is almost some cause for alarm there in your discussion of 4 out of 12 drill instructors performing duties and discharging functions other than what they primarily should be assigned to do. Is that a budgetary phenomena, an unmet budgetary deed?
General ERNST. Sir, it is not directly. Indirectly, it probably is. And I say indirectly, because it goes back to the BASOPS and training support. If you had the adequate, say, bus drivers, truck drivers, then the drill sergeants would have better boots on the ground at the training site.
If we had—at one time in the training base, we had all contract KP's, which allowed all the soldiers and the drill sergeants to be out training. For monetary reasons, we have had to eliminate that KP support contract, so now you have got soldiers pulling KP who are, in fact, trainees. Well, you can't have soldiers supervised by a civilian contractor who is actually running the mess hall in terms of preparation for food.
So you have the drill sergeant supervising the soldiers in the mess hall. So the net effect of all that, although not—the drill sergeant's absence is not directly related to budget; indirectly, it absolutely is.
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Mr. BATEMAN. Well, it seems to me that it represents something that is degrading your capability to train the troops.
General ERNST. Sir, as I mentioned in my opening statement, I am confident, and can say to you as honestly as I can possibly say it, that we are training soldiers to standard at Fort Benning. When we graduate youngsters out there at a training base, they are infantrymen. They are fit, tough. But we make up the difference. The drill sergeants make up the difference at night, on weekends. Where we go, what would normally be remediation, sometimes it is primary training for those soldiers who missed training because of KP or other things.
What that means is where it would normally be a 6 1/2-day training, 6 to 6, and a half-day training week becomes a 6 1/2 to a 7-day training week, which has an impact on the trainee, and also has an impact on the drill sergeant, as you can imagine, impact on that drill sergeant and his family.
Mr. BATEMAN. In other hearings and in going out into the field, there has been considerable focus on the fact that there has been a shortfall in the retention of certain highly skilled areas, particularly in technical skills that relate to the ability to maintain with out undue stress very sophisticated equipment. If that is the case with respect to senior NCO's in operational units, are you experiencing that kind of a problem with your senior NCO's and your mid-term NCO's in the training commands?
[The information referred to can be found in the appendix beginning on page 1007.]
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General ERNST. I will launch first, if you don't mind.
Right now, as I mentioned, I am also the Chief of Infantry. I look at the Infantry noncommissioned officers' structure across the Infantry, all four MOS's of the Infantry and all five different types of Infantry.
Right now, retention of our noncommissioned officers is excellent; but that was not without cost. I mentioned the enlistment bonus. There is also a significant reenlistment bonus. In some cases, for example, those soldiers who spend an awful lot of time away from home, like our Rangers, they have a generous reenlistment bonus. So we are doing very well indeed in the infantry.
Mr. BATEMAN. Admiral Bucchi.
Admiral BUCCHI. Mr. Chairman, actually, because of how, chiefly, that our training is organized, I really have only a very, very few numbers of enlisted. Most of my people that used to be enlisted are now civilian contractors.
But I can comment on retention in general for our instructors; and that is that, certainly, there is no difference—or the numbers are not any better in the training command than in the fleet as far as our ability to retain them. I believe all the services are sharing in the same problem. I can tell you it has the attention again from CNO on down, personal involvement of trying to turn this problem around.
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I can also share with you that, of all the aviation flags, we had all but about five at a meeting about a month and a half ago that we spent the better part of one-half day talking about retention. It is a tremendous problem. We can't turn it around, and we are going to all pay the price a little bit later on.
Mr. BATEMAN. General.
General PELAK. Sir, the Air Force is a high-tech operation, as you know; and one of our biggest problems is, obviously, retaining our people. We have had problems with first-term and second-term reenlistments. The rates have gone down. When we drew down our force as part of the drawdown, we also lost a lot of experience in the 5 and 7 level area, which we are trying to catch back up with now.
But when you look at our force, air traffic controllers, for instance, any of those high electronics background areas are a drain. With the heavy ops turbulence that we have out there now and the quality of life and the dollar drain because you have a good economy, we have an issue that we have to deal with there.
That is one of the reasons that the Air Force decided to go to this Mission Ready Technician Program, to bring on our three levels as highly proficient as they could to offset some of that loss out in the fields. But we do experience on-the-job training deficiencies because of the fact we don't have the senior level management out there to train our people, yes, sir.
Mr. BATEMAN. General.
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General HOLCOMB. Sir, on the retention side with the high-tech, what we call military occupational specialties, yes, we see a challenge there, particularly with things like computer systems and computer small systems operators, that sort of thing. They get the training and they leave and join the civilian workforce where they can, frankly, be paid about twice as much as they are drawing as marines.
On the NCO side of the house, we are holding our own. But that—I need to put that into context, and the context is that we are a force that has been built on cyclical readiness. We get ready for deployment, a very demanding period. We go on to deployment, a family separation. We come back. There is a bit of a standdown. That is how we have been operating. And then our NCOs would be moving into the supporting establishment, in training community.
Within that training community, we have our drill instructors at Parris Island and San Diego. They are putting in extraordinary hours. They are rewarded for it. There is a lot of prestige in being a drill instructor, and we have meritorious promotions. And, frankly, it is a hard to find a Marine sergeant major who has not had a successful tour as drill instructor.
But then, on the other side of our training establishment, we get to the skilled training, for example, at the infantry school where we have recently revised that; and we have taken it from a 54–59-day course down to 34. We have done that by working 7 days a week; and, frankly, those NCOs are out there about 200 nights a year.
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In short, we are doing it on the backs of our instructors. Will they be able to maintain the deployment OPTEMPO that they have and then go right into a training environment where there is no respite and put those 200 nights a year out in the field? That remains to be seen. We are watching that very carefully.
Mr. BATEMAN. Thank you, General Holcomb.
Congressman Pickett.
Mr. PICKETT. Thank you, Mr. Chairman.
An issue that I see here that is somewhat troubling is the compression of the period of time devoted to training some of our people. That is, we are reducing the time period that they are actually in the training process. I would like for each of you to tell me if this is being driven by a lack of resources to continue the longer program that had been used previously and whether or not you believe that the shorter training program is producing the kind of well-trained people that we need in our military today.
I guess, General Ernst, we can start with you. I think you started out.
General ERNST. Yes, sir. I will answer it from two perspectives, if you don't mind.
My previous assignment, I was on General Hartzog's staff as his Deputy Chief of Staff for Training here at Fort Monroe; and one of the duties that I did for General Hartzog was, several years ago, about 3 years ago, we reduced the number of instructors in TRADOC by some significant factor. It was driven by resources; and, because of that, we eliminated courses. Each of the schools was asked to look at their course catalog and see if—prioritize those and eliminate some of those courses.
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Now, that is not all bad. Some of those courses were there probably too long, and that was OK.
In other cases, that meant we were passing the bill back to the Army in the field to do that kind of training, because the institutions' side of the Army would no longer do that.
In other cases, for example, in advanced individual training [AIT], most of the AIT's were reduced by some number of hours or days for an average of about a week reduction in the length of advanced individual training. Some cases, once again, you can honestly rationalize that. Technology had changed, and so, therefore, that was OK, but not in all cases.
But with that aside, that is history. That was about 2 or 3 years ago. At Fort Benning, GA, right now, in infantry, at one station unit training, as I mentioned, we are doing that to standard. I am confident of that. In fact, we are going to add a week to that like basic combat training [BCT].
General Hartzog mentioned there is a week added to BCT. We will pick up another week in infantry, so it will be 14 weeks. And it is a tough course. It is full 7 day field training exercise [FTX] with all the rigor. When they graduate, they have touched the infantry's weapons and have qualified, if not—and if not qualified, familiarized. I am confident of that.
Officer basic course, crackerjack course, no degradation in standards there. Advanced noncommissioned officer courses, basic noncommissioned officers courses, absolutely.
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Where we take the marginal savings at Fort Benning is we go after the functional courses. Those are the special skills courses. And we may take some instructors here and instructors there and go after those in a margin.
But the baseline courses of initial entry, on the institutional size of training now, initial entry, officer education system, noncommissioned officer education system, we are holding a standard.
Now, I have got to be honest and tell you that, with the advent of distance learning—and the Army is putting a significant investment into distance learning, as you well know and you all have supported very generously—there is an expected payback where we reduce course lengths. We don't know—I can't tell you right now that the loss of 2 weeks in the officer advance course because of distance learning technology, which we know will be coming, will be offset, if the graduates will be the same as they are today. I don't know that yet. I don't know that they won't. I suspect that they will, but I just don't know that.
But we know that we are going to pay for that bill with reduced courses; and, in some cases, that will mean that the officer, individual officer, noncommissioned officer, that the learning will occur someplace.
If I export distance learning—let's say I export 2 weeks of an officer's course, the officer will then do that particular part of the course while he or she is in an operational unit at Fort Bragg or Fort Hood.
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The real question is, given the OPTEMPO of the current TONE unit, the go-to-war units of our Army, will they be able to devote the necessary time that you would normally do? One of the nice things about going to school is you check out of that net, and all you have to concentrate on is being a student. Now we don't know yet whether distance learning will be the panacea that we expect it to be. We hope so. We are investing a lot into it with that expectation.
Mr. PICKETT. OK. Rear Admiral.
Admiral BUCCHI. Thank you, sir.
Actually, in the aviation side, we probably have not cut—compressed any of the actual syllabi that we operated under. The one that I can probably speak to with a little bit more history to it would be the strike pipeline that we go through.
When I went through it just a couple years ago as a young student, it was about a year and one-half program from the time I was to begin to the time that I would get my wings. Today, that same strike program, although it has gone through different iterations over the years, it is still advertised to be basically a year and a half long. So we are not really compressing those; and, if anything, we may be adding to them.
There was some time back quite a few years ago that part of those programs were cut. But because of how we try to design our syllabus—and remember I mentioned we really are hung up on the word quality—we want to make sure that it is—quality is the thing that comes out the door; we meet with our customer. For us, it is the fleet replacement squadrons. We ask them what is the product like, and they help us design the syllabi. So I don't really see us cutting any there.
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We are trying to use the new technologies that we are getting with our new aircraft, such as the T–45 and soon-to-be T–6. But we will have more integrated computer classroom merchandise to help instruct with. But that is where we would be getting our savings.
Mr. PICKETT. The part of your testimony that troubled me was this comment you made here that said the entire aviation training continuum, it says, is being examined with a goal of reducing time-to-train from the accession process.
So I guess my question was, are you doing that because of money constraints or are you getting better? Are your pilots going to be as well-trained as they have been in the past?
Admiral BUCCHI. I see where you are coming from. I probably didn't word that very well.
Earlier in my testimony, I mentioned that the third criteria we have is time to train. Because of some force structure changes and some imbalance in resources, instead of getting that part out in a year and a half, the strike pilot, this thing has expanded because of those problem areas to now, today, it has taken that young individual about 3 years to get out the door, to get on over to the fleet replacement squadron.
So when I talked about trying to reduce the time to train there, I am trying to take the excess time that we have right now because the pipelines are actually just saturated. We have pools, and the pipeline is saturated. We are trying to work back out of that. We have the resources now, and we are trying to push that time to train back down to the norm that it should be. So that is what we are trying to do, not the opposite.
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Mr. PICKETT. General.
General PELAK. We haven't directly reduced any course loads because of budget issues. Now, as an indirect effect, of course, because we are looking for better ways to do business, you have to. We are—the commission of central training is being done, and we have well-trained airmen. But we look at technology infused in those types of things which will bring on some economies of effort. The interactive courseware development, we have done some of that; and we have actually deployed some of it and seen our training can be reduced substantially by allowing that to be used in the classroom.
Distance learning is another issue that we have been investing in and been involved in, but I can honestly say we haven't reduced any essential training as a result. Now the ancillary training, some nice-to-have training, perhaps, has been affected by it, but that is a different issue here.
One thing I should mention to you—and earlier you talked about the issue of basic training and the length of basic training. The Air Force has got a 6-week program, which is the shortest of all the services; and I thought I would mention this just for a second so I can clarify the point that General Newton made earlier.
We have a phase program, which is a continuation of basic training, which goes all the way through your advanced training when you go out into the field. So you basically have a very tight controlled environment at basic training, and you keep it that way initially through the five different phases that we have. You give the individual some more responsibility and more liberties as they go through the training program, so when they get fully finished with all the training they not only are academically smart and technically skilled but also mission ready airmen from the standpoint of taking on those responsibilities.
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But to answer your basic question, though, we haven't reduced any course lengths as a result of budget. But more out of economizing and trying to find a better way of doing business.
Mr. PICKETT. General.
General HOLCOMB. Yes, sir. Ours is more a better way of doing business as well.
As General Ernst described earlier, we get this training bubble that goes through our pipeline every year, because 46 percent of our people come in through June, July, August, September; and if they are waiting for a school seat, that is inefficiency.
Essentially, our choices at that point are we either increase the size of our training pipe or we expedite the flow through that pipeline. We expedite that flow by shortening the course length, having more courses, increasing the frequency; and that is another way of increasing the capacity of the training pipeline.
So we have been going through our training pipelines, each one of the MOS's and looking at them with regard to the relevance of the training for the operational environment, the current and projected future and also the relevance with regard to the new American citizen that we are getting and the facility that they have with training technologies that you have heard General Hartzog and others describe that we didn't grow up with. As a result of that, we are modifying those training tracks.
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What that is meaning for us is that those training tracks are—we are finding we can do more in less time, and the marines stay interested.
The bill payer here is the instructor, because the instructor now is not getting that respite. So he or she is working longer, more classes per year, that sort of thing. The students going through are happy. Big smile on their face. Six, seven days a week, that is OK.
The last point I would like to answer is your question about quality. Sir, we have—we have not compromised the quality; and I would say in the example that I gave you a few minutes ago about the infantry training, where it went from 59 days down to 34, we actually raised the standards for that training throughout.
We looked at the operational environment, the urban fight, the night fight. We have two and a half times the night training in 34 days that we did in 59 days. We have three times the urban days in 34 days that we used to have in 59 days. We have increased the gunnery standards. Where we used to have a day live-fire attack and a blank-fire night, now we do both day and night life-fire attacks and day and night life-fire ambushes against moving targets.
So just a couple of quick examples to show that we have not compromised the quality. We have actually raised it; again, the bill payer being the instructor.
Mr. PICKETT. Thank you.
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Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Congressman Pickett.
Congressman Scott.
Mr. SCOTT. Thank you, Mr. Chairman.
I was delighted with the last panel to hear that we were not losing focus on jointness as we prioritize. I just make that comment.
A question on the reenlistment bonuses. It seems that bonuses would be a lot cheaper than training people from scratch. How effective are those bonuses?
You know, in my other committee, we have noticed some significant demand in the private sector for those with a technology background. Could we get a comment on how effective those bonuses are and whether or not it would be cheaper to increase the bonuses rather than to suffer the losses?
General ERNST. Sir, I will start. Because, although we are not considered a high-technology branch, what we found out is, because the infantry is easily cruising at above-average in mental category, and high school and college graduates included in that, that we traditionally wouldn't have a reenlistment rate that would match the rest of the Army. And that is OK, because the infantry is broad at the base, and it is a very wide base. So it is not unusual that a lot of young men join the infantry for the college program or they are just not sure what they want to do with their lives.
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However, about a year ago, we were going backwards in reenlistment. We were beginning to lose ground in reenlistment, which obviously affects your noncommissioned officer corps and the future of the infantry.
We went to the Department, and they put a reenlistment quotient of 1.5 on the standard Infantrymen and 2.0 on the Rangers, which is 1.5 or 2.0 times their base pay, and that turned the corner.
Right now, we are selective in who gets to reenlist, again, which is important for us, obviously, in future quality; and we are delighted with the impact. Our appreciation is exactly what you said, sir, you don't have to retrain that individual. Not only that, when you are getting the right quality, you are guaranteeing the future of the noncommissioned officer corps.
Mr. SCOTT. In terms of the effect that the training inefficiencies have on the quality of life, we have heard additional KP. Could we have some comments on additional morale problems, separation from family and medical, whether or not it has an effect on whether we are losing in the area of medical support?
Admiral BUCCHI. If I could go ahead and jump in on that one.
Let me go back to your first one very quickly. The reenlistment bonuses, whether you are talking enlisted or officer, I think is quite important. I know it has a lot of priority from the CNO in our case; and I think the other services, too.
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I would also add to that, that that is not the answer. There are other pieces of it that we have to pay attention to.
Your second question kind of goes right into that, and that is the quality of life. Certainly the money is part of quality of life that we all have to own up to. But there are the other pieces, our working conditions, the medical pay, the things that have been identified as the key ingredients to quality of life, I think are very important.
I do not believe, for the most part, we have paid as much attention to those as maybe we should have. I hope—hopefully, that we are turning around that corner now; and we are headed pretty much into that because we are realizing, in order to have readiness, the quality must be there for the lives of those that support us, meaning our families and not just those of us on Active duty.
General PELAK. Sir, I will pick up on that.
I think the reenlistment bonuses are important to us. But in the big order of things, I think they are relatively small compared to what the draw is on the outside marketplace.
I think the senior—we went from about 40 specialties up to 80, as General Newton mentioned earlier. But when you look at the recruiting advertisements we have and you offer 15,000 or 30,000 or 60,000 to come in, get an education and get back out, $6,000 to reenlist at a 4-year point doesn't make a whole lot of difference to a person. I think that is something you have to weigh in the equation. I am not saying we shouldn't have selective reenlistment boards [SRB's], but maybe we ought to look at those in the context of comparison.
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The other thing is the quality of life; and, as you mentioned, there is a perception, if nothing else, that we are losing a lot of our benefits throughout the time we have been in our careers.
The retirement plan has changed substantially, as you know, since the time I came in the Air Force. The health plans now, the program—what is available to you when you get over 65 and the subvention problem that you have with health care, all those things are looked at by the troops, and they say, well, what is the long-term value of this? Do I want to do this long-term? They look at the workplace from the standpoint of turbulence, the demands on you and your family. When you add all those things up together, I think it is a tough decision to make sometimes.
People love the Air Force and love serving in the Air Force and all our services, for that matter, but it is drain on the family that has to be taken into account, and you have to look to the future as well. So when money talks and the economy is good, people have a tendency to walk on us. That is a fact of life.
General HOLCOMB. Sir, our service also supports the reenlistment bonuses; and I echo the comments made earlier about it is a total equation, though. A lot of factors have to be considered, and I just use one example.
For our female drill instructors down at the recruit training battalion at Parris Island, SC, they are proud of turning out marines, and they like the propay and those sorts of tangible benefits that come with it. But a factor that is going to make a great deal of difference to them is the fact that we are going to add another series, enough instructors to run another series down at the recruit depot. That is going to alleviate the situation where they turn out one series on a Friday, and they turn right around and pick up the next one on a following Monday or Tuesday. Of course, those are very demanding 12-week courses; and that is a drain on one's freedom and one's personal time.
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So by building in a little extra infrastructure at certain key points along the way, we are going to be able to improve the quality of life; and that will go, in some cases, farther than the proficiency pay or the bonus.
Mr. SCOTT. I will ask you one last question.
We have talked about simulation in terms of distance learning. We haven't talked as much about simulation in some of the training, computerized training we have here at Fort Monroe and the center in Suffolk. Can you estimate the cost savings generated by that kind of training, and is the training as good?
General ERNST. Sir, let me take that on first.
The Army is in the process of fielding a simulator, not simulation, called closed combat tactile trainer [CCTT]. It is a suite of mock-ups, if you will, of Bradley and Abrams fighting vehicles. So that, in essence, you can train a company-level organization and, to a lesser degree, a battalion-level organization in simulators, where the crews and commanders would actually be in the vehicles. And the replication, the fidelity of those is excellent. You can change terrain, you can actually engage targets, be shot, and so forth.
In terms of payment for that, for the Bradley fighting vehicle, we will have given up about 60 miles, OPTEMPO miles in terms of resourcing in order to offset the cost of the CCTT. The Abrams tank is more than that. So the OPTEMPO, being dollars now, resource dollars, it is being paid to field those systems.
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We at the infantry school and my brothers at the Army school——
Mr. SCOTT. You are saying it is going to cost money doing that, or are we going to save money doing that?
General ERNST. Sir, in anticipation of saving money, you are paying with OPTEMPO dollars that you would have otherwise run those Bradleys and Abrams in the field, about 60 miles or so for the Bradley, more for the Abrams vehicle. That is in anticipation that the training fidelity is about the same. It is OK to pay 60 miles of OPTEMPO to train in the simulators and then still be able to go to the field. So you mix simulator and field training.
Now, through the fidelity, we know what things we cannot do in the simulators. That is why we are maintaining sufficient amount of field mileage, the OPTEMPO miles, and also to be able to shoot live gunnery exercises and come out on life-fire exercises in the field. So it will always be a mix of simulation, simulator and field training, constructive virtual and live training.
That is the Army's methodology and approach to going to technology. But we had been using gunnery trainers for some time in the Bradley and Abrams fighting vehicles, and it is much like an aviation flight simulator except that you can actually do precision engagements.
We can do the same thing in a collective level, the close combat tactical trainer. The however is we still need a sufficient amount of ammunition and field training to season the force, to train the force.
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Oh, by the way, that is the kind of training that excites youngsters. There is another equation in all this, is technology will do a lot of things for you, but I have got to tell you, youngsters don't enlist in the infantry to go to a simulator. They like going down ropes. They like going up ropes. They like falling out of airplanes. They like shooting weapons at night with night-vision goggles. That excites them. So there is another piece to that.
General HOLCOMB. I could add to that that we have, on the ground side, have really started to use simulators in the last few years. And I would say, thanks to the committee's efforts in years past and your colleagues, that we have something called ISMIT out there right now; and it is saving us about $20 million a year at our infantry training battalions alone. It enables us to develop and practice our gunnery skills for a variety of small arms.
I would say that we are moving more and more toward a principle that goes like this, that you can practice with a simulator, but you can qualify with live ammunition.
We have had some noteworthy examples of battalion commanders who used things like the ISMIT very well to practice with and gone on to win cruiser weapons comps with actual live rounds going down range.
With that said, I think, on the ground side, we are behind the aviation side of the Marine Corps, which is better used to, and as standards already developed, it can be satisfied by simulators. So we are looking to expand our use of simulators in the Marine Corps.
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We are also looking to expand our use of range instrumentation systems. Range instrumentation systems give you an opportunity to run a problem and see what really went wrong during that problem, which squad was really more effective than another one. You can do some analysis on it. You can experiment with tactics. You can see who is trained to standard.
The Marine Corps, frankly, does not have any instrumentation systems. This is something that we think we need to move to, particularly as we start looking at the operational environment, the idea that we need to run our operations with the idea of near-zero tolerance for casualties in mind.
So that means you are going to have to run this same problem, not once, not twice, not with just blank ammunition, not with just live ammunition against a target, but force-on-force instrumented so that people can see what is effective and what isn't effective. We haven't gone as far in that regard as we need to, and that is an area that we are looking to improve in.
General PELAK. I would like to follow up on that and mention the fact that we have demonstrated, over time, that simulators can be a lot more economical, obviously, in the flying business. We do that all the time. We are looking at the same idea in the OPS training world in the Air Force.
The challenge you have, of course, is the up-front cost you have for technology development. Making smart mockups, virtual reality, that all costs money. It will pay back in the long run, give you access to equipment that you may not have.
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Obviously, equipment you need in the field for operational activities. It goes without saying. But I think the real potential there is that you can get better training and a better quality training across the board if you can make the up-front capital investment. But I think, long term, you will save. Short term, it is going to be an expense.
General ERNST. Sir, if I might just add one to that.
The way the Army is looking at training and technology where we are going is, ultimately, the training technology will be imbedded in our operational capabilities.
So that assuming that we have rapid terrain generation, that we can pull down information, the ultimate training is rehearsal for an actual mission. So what we are looking for in our training technology, where we are going with it, is so that we can do mission rehearsal. In some cases, that will be en route mission rehearsal.
If you take the Rangers and give them 9 hours to get out of town at Fort Benning and they are en route, you would like them to be able to continue their preparation while they are en route to their objective area. That is where we are going. We are not that far away.
There are some problems in simulation, particularly when you go to small unit operations in very close combat sets, fighting in cities is an example, fighting in very close terrain. The replication for individual small unit combat is a real challenge for technology in terms of simulation and simulators. We are not there yet as we are with fighting vehicles or aircraft. We have much better replication fidelity there.
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But we have made significant strides, that is a major deliverable, in two programs that we in the Army have partnered with the Marine Corps', military operations in urban terrain [MOUT], advanced concept technology demonstration [ACTD], and ODOPRUS, small unit operations piece, that explore just that particular dilemma.
Admiral BUCCHI. If I could very quickly add, on the aviation side, I am not sure I know what cost savings would be. I am not sure if any of us really do. I would tell you, though, that we use it as an integrated piece of our training.
If you go back and look at, probably not only the syllabi that I have in the training command but if you go to the fleet reserve squadrons [FRS's] and maybe even the fleet squadrons, you will find that we have about as much time in the simulators, those trainers, as we do in the actual airplane itself.
So it is very much integrated, especially for us in the naval air training. We have the simulators today that are able to really replicate what we fly, not like the earlier models that really had a bad reputation. But we use them not only for procedural trainers but we have them for weapons systems. So we can really pretty much employ the machine throughout its envelope with the trainers that we have today, and it is very much integrated with what we have.
Mr. SCOTT. Thank you, Mr. Chairman.
Mr. BATEMAN. Thank you, Congressman Scott.
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Well, I think the time has come for us to wrap up our proceedings this morning. Let me say how pleased I am to have had this second panel and to thank you for the capability and dedication that you bring to your responsibilities and for the job that you do in leading your training commands.
I would like, also, to make reference to the fact that we have had in the audience today a number of representatives of veterans organizations and military retirees, and we appreciate the interest that you take in what is currently happening in the military forces that you are a part of and are dedicated to. We are very pleased to have had your presence here today and your continuing interest and support for the people in our military.
We certainly hope, as reference was made, I think, by General Pelak, that we will be considerably more mindful of this perception that the benefits that go with a career in the military are eroding and that we can reverse that trend.
All of us on this panel are certainly very much aware of the problem that we are confronted with in terms of military medicine and the health care that veterans were entitled to receive but are not receiving as it was intended.
I have become particularly sensitive in the last few weeks to testimony from newer members of the service who are very much concerned that their retirement program is not the same retirement program as people who have been in the service longer. This degradation in the retirement benefit is much more of a problem than I had sensed that it was, and I already thought it was a very unfortunate development.
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So we have got to be very, very mindful of the fact that we have this magnificent military and the people who make up our uniformed services today. But you can't retain, you can't maintain it unless we are willing to pay the price of supporting them in the manner in which they deserve.
My thanks to everyone. We will conclude the hearing, and I do appreciate the participation of the panels.
[Whereupon, at 12:30 p.m., the subcommittee was adjourned.]
The official Committee record contains additional material here.
QUESTIONS SUBMITTED BY MR. BATEMAN
ADEQUACY OF TRAINING
Mr. BATEMAN. In your personal opinion, are the personnel within your respective commands receiving the required training to develop the necessary skills necessary to perform all of the tasks that will be assigned to them?
General HARTZOG. I will answer your question in tow parts. As you know, our Initial Entry Training (IET) program is comprised of two components: Basic Combat Training (BCT) and Advanced Individual Training (AIT). We also have One Station Unit Training (OSUT) which combines BCT and AIT into one course.
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First, we will consider BCT and the applicable portion of OSUT which correlates to BCT instruction. Here trainees are taught the basic skills that will enable them to survive on the modern battlefield. These basic combat skills are common to all military occupational specialties. As such, every soldier in the Army is required to demonstrate proficiency. Beginning in Oct 98, we will add an additional week to BCT which expands common military training on Army values, customs, and traditions; increases rigor and physical fitness training; and uses an end of course Warrior field training exercise (FTX) as the defining event in BCT where all trainees will demonstrate all the skills they have learned in BCT in a simulated combat environment. I can assure you that our soldiers leave BCT trained in the skills necessary to carryout his or her mission on today's modern battlefield.
In AIT and applicable portion of OSUT, our soldiers received technical training in their assigned Military Occupational Specialty (MOS). We provide AIT in 175 different MOSs in 23 locations. AITs range from as short as 4 weeks to as long as 63 weeks in length, with the average being 14 weeks. Since 1990, we have directed our AIT locations to implement reductions in their programs of instructions (POIs) due to Department of the Army (DA) directed funding cuts. For the most part, the cuts have resulted in less time we provide our soldiers to become fully proficient in their technical skills. Today, we send to the field a soldier who is capable of performing the critical tasks necessary to do their job, but will require further training to reach the full MOS level of proficiency. The field units reinforce the soldier's new skills, focusing on the unit's mission requirements.
In some MOSs, some critical tasks are not taught and are deferred to the units due to availability of equipment and lack of time. We work with the field units to inform them of the training proficiency of the soldiers they receive.
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General NEWTON. The Year of Training Initiatives refocused technical training to ensure we are providing the best training through the best methods at the right time in a person's career. We carefully man our instructor positions with the ''best of the best'' in order to provide our trainees with the best possible training. We revitalize our instructor force regularly by bringing in new instructors with current operational experience to ensure we keep the proper field perspective in the schoolhouse. Courses are designed based on the training requirements set forth by the functional communities. The functional communities identify the necessary skills to perform the tasks as well as the level to which individuals need to be trained, and then we teach to those requirements. Our goal is for our trainees arrive on the job with fundamental knowledge of all equipment, procedures and responsibilities necessary to perform assigned tasks.
In the arena of flying training, we are training most of our advanced students to a basic qualification capability in all of our major weapon systems (MWS). In addition, we provide extensive mission qualification training that makes most of our crews ''near mission ready.'' Due to resource limitations (aircraft, instructors, and flying hours), we must finish mission ready training once the crewmember arrives at the operational unit.
Admiral TRACEY. The Navy training team does an excellent job of identifying, developing, and providing the training required by the fleet. The only chronic problem we face is when there is a PCS/TEMDUINS funding shortfall. When this occurs, either Sailors are ordered directly to the fleet, bypassing the training their billets require; or they are ordered to their training, but must wait at the training command after they finish their courses, until funding is available to transfer them to the fleet. In both cases, the fleet is short a trained Sailor.
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General RHODES. The instructors at our formal schools have all the necessary skills to produce the quality Marines our operating forces require. We take great pride in our instructors and strive to ensure that only our best people are assigned to this demanding duty. Through both formal and informal screening we ensure that Marines assigned as instructors have the necessary technical and professional competence. In addition, we provide them with the necessary instructional skills so that they are able to provide effective and accurate training. Finally, constant mentoring by their senior leaders ensures their continued proficiency and professional development.
General HOLCOMB. The Marines of Training and Education Division are responsible for developing, conducting and resourcing the training, and training support required to prepare Marines for current and future operational environments. Our instructors and staff, serving at over 304 different schools, are the keys to this effort.
Instructor duty is an important career broadening assignment for our Marines. Prior to assignment, prospective candidates are screened to ensure that they possess both the technical and professional competence necessary for this demanding duty. A high degree of technical competence is the foundation for being a successful instructor. However, this is only a portion of the qualities we look for in our instructors. Since they will serve as role models and mentors for our young Marines, they must also represent the qualities espoused by our core values. Our screening process strives to ensure that only those Marines who possess these attributes will be assigned to our schools.
The qualities these newly assigned instructors possess are further enhanced by the training they receive upon reporting to their assigned school. This training, which lasts an average of thirty to sixty days, is designed to ensure that they are able to impart the knowledge they possess, effectively and accurately. Upon successful graduation from one of our Instructional Management Courses, new instructors begin training Marines under the constant mentoring of senior leaders. Our three step process (screening, training, and mentoring) provides effective instructors capable of performing the training tasks assigned to them.
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Mr. BATEMAN. In your personal opinion, are the training centers in your respective commands adequately funded and do they have all the necessary equipment to perform their training?
General HARTZOG. Although there are isolated instances where funding, personnel, equipment or facility shortfalls constrain training, in most cases Training and Doctrine Command's schools and training centers conduct training to standards. However, additional funds are needed to replace furniture and equipment, and purchase PCs, repair parts, POL, and other training supplies. Training and Doctrine Command has identified need for $125M in Fiscal Year 1998 to accomplish these fixes, a shortfall of approximately 20 percent. We also need to modernize our training facilities for 21st century teaching methods.
General NEWTON. Training has not been immune to the current austere funding environment. The Training Groups are historically funded at approximately 85 to 90% of their requirements. Across the board in flying training we require additional aircraft to conduct the training our customers request. Additionally, we need to fund technology insertion and replace aging infrastructure in order to gain efficiencies in the future. With our assertion that training is a readiness issue, we feel it is imperative to fund training as a readiness priority.
Admiral TRACEY. The training centers are generally adequately funded to perform their training functions, and maintain the minimum amount of equipment required for their respective courses; however, current funding is at a level that we cannot afford to lower. The relevant factors and methods of costing training in the Navy are complex. We have had to make internal funding cuts during FY98, including cuts to equipment support as well as real property maintenance, in order to insure that we produce the quantity and quality of trained Sailors required for fleet assignments. Our austere overall funding requires us to operate with a very slim margin of error, and as a result there is no slack in the training system.
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General RHODES. Presently, we are sufficiently budgeted and equipped to allow us to conduct the training needed to provide fully capable Marines. To date, we have confidently briefed at every level up to—and including—the Commandant of the Marine Corps that the FY99 training and education budget is adequate to accomplish our current objectives. Provided that current training resources are not overburdened by emerging requirements, we currently have the necessary resources to successfully train our Marines.
However, the long term outlook is not so certain. A particular challenge for me is balancing the modernization requirements of our operating forces with those of our training establishment. In the competition for scarce resources, our training establishment is coming in second to our operating forces. We know we should be investing more in the range instrumentation systems which will give our Marines the opportunity to fight multiple engagements against the asymmetric urban foes we think they will meet. We know that the up front investment we must make in simulations will eventually result in lower ammunition and operations and maintenance (O&M) costs. We know that the training edge afforded by simulations and range instrumentation will enable mission accomplishment with significantly fewer casualties. However, there is only so much in the top line, and we also know we must invest in modernizing our force: Training in operational units suffers because scarce O&M dollars and precious time and people are being expended to maintain aging equipment. In the never ending struggle to provide highly ready units, we find ourselves constantly adapting, focusing, and shifting resources. We are making it, but we are doing so because of marine pride, self-sacrifice, and commitment.
General HOLCOMB. Our schools are struggling to produce the numbers of Marines required by our operating forces. The level of performance to which we must train and the number and complexity of tasks continues to increase. While our current funding allows us to meet present needs, emerging requirements are outstripping our capabilities. To address these new requirements we have to make our training continuum more effective, institute modern distance learning technologies, and increase our use of simulation and instrumentation.
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Our modernization initiative embodies a shift to core and core plus competencies which will permit us to better focus our training resources. To gain full advantage from this effort we also have to increase the use of technology in our formal schools for training core competencies. In addition, we must provide the proper mix of distance and resident learning for core plus competencies. To accomplish these goals requires us to make some up front investments. The funding strategy we have developed is within current Marine Corps resources. However, while our training modernization and distance learning initiatives are competing well presently, there are many other critically needed initiatives which could place them at risk.
When we speak of training we can't simply focus on the schools. Schools focus on training the individual marine, but that is not the way the Marine Corps fights. We fight as units. The complementary piece to the modernization initiatives for skill training is the training support and modernization needed to make our unit training more effective.
Critical to this effort are our simulation initiatives. Limited ranges and training areas, environmental restrictions, and constantly decreasing budgets restrict our abilities to support all of the training our operating forces need. Simulation, while no panacea, offers us the capability to overcome many of these obstacles. The principal simulation initiative that we are pursuing is the Combat Vehicle Appended Trainer (CVAT). The CVAT system incorporates the operational weapon platform (M1A1, LAV, and AAV) as part of the training system, thus allowing Marines to train as a full crew in there combat vehicle within a synthetic environment. The Marine Corps has a requirement for 142 systems.
The second piece of our unit modernization initiative is increased investment in range instrumentation and automation. Instrumentation provides our commanders with near-real time specific and quantifiable feedback on individual and unit actions. This ability greatly increases the benefits derived from training. Units see what they did wrong and more importantly can identify why it was wrong. Training becomes more focused because we can now zero in on actual weaknesses, not perceived ones. The Range Instrumentation System (RIS) is the cornerstone of our instrumentation effort, but it is costly. We have a requirement for four ranges. Although we intend to primarily utilize commercial-off-the-shelf equipment, there is an estimated up front cost of $25M for research and development.
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The third piece is our range automation initiatives. In this area we are pursuing two programs: Remoted Target System (RETS) and Location Miss and Hit (LOMAH). RETS is an automated target system which will provide the essential bridge between known distance target shooting and combat shooting. Its introduction will provide the realistic combat shooting training essential in today's complex operational environment. More than ever, Marines must be trained to distinguish between noncombatants and armed enemies, and to rapidly, and precisely, bring accurate fire to bear on only the enemy. We have a requirement for twenty RETS ranges at three different locations. LOMAH is an automated known distance marksmanship training system. This system will reduce the number of personnel required to support rife marksmanship training and reduce the amount of time required to complete such training. We have a requirement to equip 17 ranges.
The above systems will increase realism, broaden training opportunities, and in the long term reduce our training and operating costs. More importantly, these systems have the potential to enable mission accomplishment at significantly lower cost in human life. However, because they must compete with critical modernization initiatives for our aging equipment, the funding required to execute all of these initiatives is in jeopardy. Our marines need these systems but we have not been successful in procuring them.
Mr. BATEMAN. In your personal opinion, is the equipment that the training centers within your respective commands train with the same or similar to the equipment that trainees will be assigned to upon completion of training?
General HARTZOG. Yes, For the most part, the Army does a good job of supporting the Training and Doctrine Command's (TRADOC) training centers. The Army's Deputy Chief of Staff for Operations (DCSOPS) establishes the Army's priorities for fielding of equipment across the force. Current DCSOPS policy is to provide TRADOC with sufficient quantities of new equipment to train the primary operators and maintainers of that new equipment in the institutional training base. TRADOC, in coordination with DCSOPS, ensures that the training equipment is reflective of the equipment the new soldiers will be expected to use and maintain in line units. However, first priority must always be to the warfighters in the field. Fielding delays, real world missions, etc, all impact the quantity and timing of equipment fielding to TRADOC and the various schools across the command. This sometimes limits the training which can be offered to equipment operators and maintainers in familiarization training.
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General NEWTON. We train with a combination of actual equipment, high fidelity trainers and simulators. When possible, we use real-world equipment to provide our trainees with the most realistic training environment—to ''train like we fight.'' When such training is cost prohibitive or would degrade operational readiness, simulators and trainers are used. When multiple kinds of similar equipment require training, we use the most representative piece of equipment. This is the most cost effective and efficient way to train. However, we do have concerns with currency issues. Many of our trainers lack the latest field modifications.
In the flying training arena, for the most part the training centers train with the same or similar equipment that trainees will be assigned to upon completion of training; however, there are several cases where our training simulators and our aircraft have not received the upgrades and modifications which the operational commands' aircraft have received. The operational commands have lacked the necessary funds to pay for their aircraft and then fund the training aircraft and simulators.
Admiral TRACEY. The equipment, specifically the technical training equipment, simulators and training devices are generally similar to the equipment found in the fleet. It is not uncommon to find equipment in the training command that is not in the same exact configuration as fleet equipment. The Navy systems commands, working with the training community, determine if equipment hardware and software changes or modifications are significant enough to result in a training equipment change. Training equipment changes are often pooled together and conducted in block upgrades/modifications to allow sufficient time to plan, program, budget, and execute the appropriate acquisition strategy and to minimize equipment downtime and disruption of training.
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Future training equipment acquisition strategies will depend more on Commercial off the Shelf-based operational systems and reconfigurable, open architecture systems. This will reduce the time and cost to modify training equipment required by changes in fleet systems.
General RHODES. Our schools conduct training utilizing the same equipment our Marines will find in their operating units. Furthermore, our acquisition strategy ensures that schools are normally among the first sites scheduled to receive new equipment entering the inventory. The Training and Education Division and the Marine Corps Systems Command work together to ensure that the right amount of equipment is provided to the schools to support their training requirements and their student throughput, thereby allowing the schools are thus able to produce Marines trained on the new equipment.
Mr. BATEMAN. In your personal opinion, are you, within your respective services, able to accomplish the levels of training required by the organizations that trainees are assigned?
General HARTZOG. Training and Doctrine Command's number one training priority is Initial Entry Training (IET). We are training our soldiers to be able to survive on the modern battlefield and they arrive to field units trained on the critical tasks of the Military Occupational Specialty (MOS). As a consequence of reduced manpower and dollar resources compared to a training load that has not been equally reduced, most of the cuts in IET were taken from the time allotted to fully reinforce proficiency in critical tasks that we train our soldiers. Cuts were also taken in training development of instructional material and in base operations support. Reductions in training development have severely challenged our ability to provide current and up-to-date instructional material, especially on new equipment that is fielded to the Army. Reductions in base operations support requires borrowed military manpower, both instructor and student, to perform functions previously accomplished by dedicated personnel in base operations support.
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TRADOC is taking measures to address these issues. We conduct a careful analysis of the critical tasks necessary for a soldier to perform their job. Our policy is train only critical tasks in the schoolhouse. However, due to budget restraints, some are deferred to the units. Headquarters, Department of the Army (HQDA) has provided authorization and funding for 600 training developers, 200 per year for the next three years, to remedy the shortages of training developers we have in the training base. I have identified the shortages I have in the training base and am working with the Department to receive those resources concurrent with Army priorities.
General NEWTON. As part of the Air Force's Year of Training initiative, AETC has moved much of former ''on-the-job-training'' to the formal in-residence programs. Especially with the increased OPSTEMPO, this has allowed operational commands to focus on their mission. Graduate Assessment Surveys show that most training needs are being met in a highly satisfactory manner. The Mission Ready Technician program has made significant strides in providing trainees immediately capable of contributing to the mission of their operational unit on day one.
In flying training, we are unable to provide the numbers, and in some cases do not train to the mission specific events, our customers need. The decision as to what level we train is a coordinated effort with our customers to determine the acceptable mix of ''numbers we train and to what level of qualification we train.'' Limited resources, again training aircraft available on the ramp, is the prime driver of this process.
Admiral TRACEY. The Navy is currently capable of supplying quality-trained personnel to the fleet, but not as efficiently as we would like to. Our schools generally have a fixed facility size and are staffed at a constant level. In contrast, our students arrive unevenly throughout the year, because of demographic factors in recruiting. As a result, we must pay particular attention to the ebb and flow of student loading. Particularly during peak periods, we must ensure that students are trained ''just in time'' as they are scheduled to arrive, and that they depart for their fleet assignments as soon as possible on completion of their training. If PCS/TEMDUINS funding shortfalls occur, trained Sailors do not arrive in the fleet in time to be replacements for departing personnel, and run the risk of missing critical points in their ship's or squadron's Inter Deployment Training Cycle (IDTC).
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General RHODES. Our training continuum is providing Marines with the character and skills that our operation force commanders require and have come to expect. In short we are providing highly ready forces. However, that readiness is coming at an increasingly high price. The demands of the current and projected operating environments are increasing both the number and complexity of our training tasks. Further, our desire to minimize casualties in future conflicts and contingencies makes proper training all the more important and complex. At the same time, the resources to support training are going down, and our training infrastructure is aging. In sum, the number, complexity, and standards, of training tasks are increasing at the same time that our resources and infrastructure are declining. We are able to continue to meet our readiness standards but we are doing so by asking our people to work longer, harder, and more intensely.
We expect, and receive, a great deal from our instructors and staff. Instructional duty means long hours preparing, conducting, and evaluating training. In many cases the training includes potentially hazardous situations where the instructor must maintain a vigilant eye to ensure students observe all safety precautions. In addition, due to staffing shortfalls, they oftentimes have additional duties besides their primary instructor duties. For instance, at our motor transport school at Ft. Leonard Wood, MO, at any given time up to one-third of the instructors have to assume the added responsibilities of troop handlers for the training companies. This means their day might begin before 5 a.m., leading their units in physical training, and not end until well after dark. Another example is our Schools of Infantry where instructors average 200 days in the field annually. This rigorous duty assignment is usually sandwiched between tours in the operating forces where these same instructors and their families have endured multiple six-month separations. Our instructors, by their professionalism and dedication, continue to give us the finest product possible, a trained Marine. They do so at the cost of their own quality of life. Our current training modernization initiatives are partially aimed to correct this problem and alleviate the burden we have had to thrust on their backs in order to accomplish the mission during a period of declining resources.
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General HOLCOMB. While we are presently producing the quality Marines our force commanders need, in some military occupational specialties we are falling short in meeting the numbers required. The increasing number and complexity of tasks needing training are straining our resources to the maximum. Our training methodologies, relying primarily on old systems of lecture following by application, are time intensive and demand exhaustive efforts from our instructors to ensure our Marines master the skills they need. In addition, the lack of distance learning alternatives forces us to include training in our formal schools which could be more effectively done at other sites. Worse, the lack of distance learning alternatives means long queues of Marines awaiting school seats at certain times of the year. These inefficiencies in our training continuum result in lower manning levels for our operating forces and subsequently decreased readiness.
We need to make our training infrastructure more efficient, leveraging off modern training technologies to deliver training where and when it's needed. At the heart of this effort is the Marine Corps Learning Network (MARINENET). MARINENET provides the infrastructure upon which all distance learning can be delivered to units and the individual Marine. MARINENET will allow the individual Marine to tap into learning resources from a diverse base of training products. These products will include interactive multimedia instruction, video teletraining capability, and network and internet based learning products. MARINENET will extend the boundaries of the school house as we know it today to deliver training products where and when they are needed.
Our modernization effort also addresses training management and includes implementation of automated and integrated scheduling tools which will help to further reduce awaiting training time. This initiative will also provide the means to establish electronic training records and an integrated training data base which will enable all training managers to better focus and track the training of their Marines.
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The modernization plan which will enable us to realize these goals is executable, but requires some up front investing. The Marine Corps is struggling to make this necessary investment in light of other competing requirements.
Cost of Training
Mr. BATEMAN. What steps are you taking to reduce the cost of training?
General HARTZOG. The Army has instituted numerous training efficiencies, some of which are only now beginning to reap cost benefits. Others will save substantial resources in the future. However, we must differentiate between costs savings, and training reductions due to funding cuts. We do not consider reductions to the fidelity of training or the number of soldiers trained to be cost reductions. Initiatives include:
Reduced first term attrition, allowing the reduction in training structure.
Employed Fitness Training Units (FTU) to reduce attrition in BCT and OSUT.
Instituted training requirements determination efficiencies by considering historical no show rates.
Re-instituted equipment surveys to uncover excess equipment.
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Created Captains Career Course which converts a 29 week course of instruction, at two different training sites, to a 24 week course of instruction at one training site.
Standard Army Training System (SATS) has been developed to allow the units to more efficiently schedule training and training resources.
Combined Arms Training Strategies (CATS) are under development to support individual, unit, and self-developmental training. CATS will interface with SATS, and determine the best methods to accomplish training objectives, making extensive use of simulators and simulations.
Expanded use of simulators, like the Close Combat Tactical Trainer (CCTT) has reduced OPTEMPO requirements, saving ammunition, POL and maintenance costs.
Army Modernization Training is now developed to be done via DL or embedded training, thus saving training time, travel and training expenses.
Total Army Training System (TATS) Courseware is being developed as a single training course for both the Active and Reserve Components. This will result in significant long term savings and cost avoidance, as fewer courses need to be kept up to date.
Expanding Privatization and Outsourcing of training, encouraging the competition present in the private sector. The Army divests itself of unneeded infrastructure.
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Additional Base Realignments and Closures (BRAC) efficiencies will be felt in FY00, upon completion of the closure of Fort McClellan in FY99 as a training installation. The Secretary of Defense has stated that more infrastructure reductions are needed. Actual impact in the training base will be determinant on the installations selected for closure, but closing excess structure should free up critical resources.
Total Army Distance Learning Program (TADLP), beginning in FY98, is a massive effort to modernize the training base and methods. Through the investment in distance learning technology, equipment, and techniques, future savings will be achieved. Savings are attributable to eliminating or reducing travel and per diem; reductions to: printing, postage, and training materials; and reductions to BASOPS infrastructure, due to fewer resident students in the schoolhouse.
General NEWTON. We are addressing cost reductions through outsourcing of support and logistics functions and certain types of training, as well as consolidation or co-location of training through joint training efforts. We are positioning our training organizations and beginning to field the equipment and infrastructure to take advantage of developing Distance Learning technologies. The Air Technology Network is expanding to provide interactive video teletraining to locations outside the continental U.S. Computer Based Training, including use of the Internet is also developing technology we will rely on more each year. These technology-based solutions require large upfront investments to reap long term savings.
In our flying training programs, we are outsourcing and privatizing as much as we can without impacting training quality or availability. We are also using simulators, not only to reduce the cost of training, but also to provide additional training capacity and to provide more realistic training for our aircrews.
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Admiral TRACEY. The recent BRAC decisions were driven by the need to reduce costs, and have resulted in fewer training sites with reduced redundancy. For example, the majority of the Navy's surface ship specialized skill initial training was consolidated in NTC Great Lakes, Illinois, coincident with closing Naval Station Treasure Island and NTC San Diego. Navy training has undertaken numerous management and technology-based initiatives to reduce the cost of training. Our goals include reducing attrition and time to train, while improving the quality of instruction. We are pioneering distance learning technologies, automated electronic classrooms, interactive electronic technical manuals, and CD–ROM based exportable training, and increasing the use of PC-based emulators as training devices instead of factory built simulators for new ship types wherever feasible. The Navy has developed, and is beginning to field, the Interactive Multimedia Acoustic Trainer (IMAT), which has resulted in measurable improvements in training sonar technicians for surface, sub-surface and aviation platforms. We are also partnering with local community colleges to contract the teaching of such journeyman skills as air conditioning and refrigeration repair in fleet concentration areas.
General RHODES. Providing the trained Marines our operating forces need within existing fiscal constraints continues to present us with numerous challenges. If we are to meet these challenges, we must gain greater efficiencies from our educational system. To do this we have embarked on an effort to modernize Marine Corps training. We are improving the process through which we identify the tasks we need to train to, when we need to train Marines to perform those tasks, and how best to train those tasks. Through greater use of simulation and simulators, we will, in many instances, provide ''real'' exposure to numerous combat situations without incurring additional maintenance and operating costs on our combat equipment. By infusing technology into institutional training, and providing the right mix of distance learning, we will reduce the length of formal institutional training, increase course iterations per year, and deliver training to Marines wherever and whenever required. This will, in turn, reduce Marine time in training and awaiting training, providing more Marines to the operating forces.
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General HOLCOMB. Overall our training continuum is in good shape, but we recognize that we can, and must, do things better. Our overarching goals are: (1) to improve the efficiency and effectiveness of training, (2) to apply technology within our classroom and distance learning strategies to extend the classroom, and (3) to improve operating force manning and training readiness.
The primary focus on our Modernization Initiative is to identify for each Military Occupational Specialty (MOS) the core competencies—those minimum essential tasks that a Marine must perform to qualify for an MOS, and those ''core plus'' competencies—all those other tasks that contribute to mission accomplishment. We will then infuse technology into institutional training for core competencies and provide the proper mix of distance and resident learning for core plus competencies. This will result in reduction in the length of formal institutional training, increased course iterations per year, and delivery of training to Marines when and where required.
Our training modernization initiatives are designed to ensure that the operating forces receive more of the highly trained Marines they need. By making more effective and efficient use of our resources, we plan to return some 5,000 man-years, which are currently absorbed within the training pipeline, to operating forces.
In addition we have embarked on an intensive effort to provide increased training opportunities to the operating forces through the use of simulation and instrumentation. While simulation is no panacea, there are both qualitative and quantitative reasons to use some simulation and instrumentation. Instrumentation, integrated into the unit's training plan, provides the commander with specific and quantifiable feedback on individual and unit actions. This feedback allows for detailed debriefings through which deficiencies in required standards can be identified and corrected. Simulators and simulation allow units to train in tasks which may not otherwise receive training. They will support training in environments which can-not be recreated in live training and in environments which are only accessible in time of war due to environmental or safety considerations. By reducing our use of operational equipment we can realize savings in time, O&M funds, ammunition, and subsistence expenses.
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Mr. BATEMAN. What is your cost per student and how has this cost changed over the past five years?
General NEWTON. The average cost per student for technical (non-flying) training for FY93 was $12,767 while the cost for FY98 is $12,435 a decline of 2.6%. This decline is attributed to base closures and a 5% reduction in course length. The average costs include overhead costs (fixed costs).
We have been successful at reducing the cost per day for a Sailor in training. However, over the past five years, our Navy requirements have called for better-trained and more technically trained Sailors—and this has in turn required the typical Sailor to spend more time in training. As a result, the training cost per Sailor has risen. Here are two illustrative examples:
RTC has increased in length by 19% from 8 weeks in FY92 to 9.5 weeks in FY97. The FY97 average cost per graduate for recruit training was $6,692 compared to the FY92 average (in FY97$) of $6,252, an increase of only 7%. The cost per student week of training in RTC, though, declined by 10.5 percent from an FY92 average of $813 (FY97$) to $728. The lower average cost per student week reflects real improvements in the efficiency of operations largely due to the closure of RTC Orlando/RTC San Diego and consolidation with RTC Great Lakes.
The amount of time a typical Sailor spends in specialized skill training has also increased, reflecting the increase in technology of the fleet. As a result, the FY97 average cost per graduate for specialized skill training was $4,929 compared to the FY92 average of $4,597 (in FY97$), an increase of 7 percent. However, the average cost per student week of training in specialized skills declined by 10.3 percent from $1,735 (FY97$) in FY92 to $1,557 in FY97. The decline in the average cost per student week reflects real improvements in the efficiency of the training process, primarily due to base closure and consolidation, outsourcing, and the first results of our infusing technology in the classroom.
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General RHODES. Using FY98 constant dollars the following are our per student costs for the past five years:
General HOLCOMB. Same answer as Lieutenant General Rhodes.
DISTANCE LEARNING
Mr. BATEMAN. Distance learning is structured training that can take place almost anywhere and anytime without the physical presence of an instructor because of the technological advances that facilitate the instruction. DOD has cited distance learning as a way to reengineer training—improving readiness and increasing the cost-effectiveness of training delivery. Although it is difficult to identify the full scope of the services' planned distance learning activities, OSD officials estimated in August 1997 that the services would obligate at least $100 million in fiscal year 1998 and as much as $2 billion over the next 10 years for such activities.
Does DOD plan to develop an overarching strategy and plan for implementing distance learning?
General HARTZOG. All services have been required to prepare Distance Learning (DL) implementation plans. The Army was the first to complete its plan which was presented at the OSD Total Force Distributed Learning Action Team and acknowledged as being the model to be followed. The other services have consequently presented their plans to the OSD committee. The services have also presented their plans to the Army Science Board in March of 1997 as part of the assessment of DL for Chief of Staff of the Army. In addition, OSD has initiated several actions designed to insure commonality across service lines for training and technology. The major effort impacting the DL is the Advanced Distributed Learning (ADL) Initiative led by the Office of the Under Secretary of Defense (Personnel and Readiness). A key part of the ADL initiative is promoting collaboration with public and private sector organizations that share DOD's common interests and needs for distributed learning products.
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Admiral TRACEY. The Navy has developed an overarching strategy and plan for re-engineering the training process that includes distance learning as a significant element. This plan is currently being reviewed in the resourcing process.
General NEWTON. OSD has developed a DL strategy based on the Advanced Distributed Learning (ADL) Initiative. The intent of ADL is to serve as the backbone for developing and applying a computer-based application of DL that can be shared across the DOD. The Air Force DL representatives are working closely with OSD personnel, and the other services, on developing standards and guidelines that can be agreed upon by all. In addition, the Air Force is developing its own strategy based on a DL Roadmap and individual MAJCOM implementation plans. AETC is contracting a review of education and training courses to determine which courses are best suited for conversion to DL, an approach similar to that used by the Army in developing their DL plan.
General RHODES. The Marine Corps has not received an overarching DOD plan for distance learning. However, the Marine Corps is working closely with DOD in the area of distance/distributed learning. From our discussions, we believe that DOD is acutely aware of the tremendous potential that distance/distributed learning has to enhance the quality of training and education, increase readiness, and reduce training costs. We understand that DOD's distance/distributed learning strategy centers on the Advanced Distributed Learning (ADL) initiative. ADL is being co-sponsored by the White House Office of Science and Technology Programs. The purpose of the ADL initiative is to ensure access to high-quality education and training materials that can be tailored to individual learner needs and can be made available whenever and wherever they are required. This initiative is designed to accelerate large-scale development of dynamic and cost-effective learning solutions in order to meet the education and training needs of the military and the nation's work force in the 21st century. ADL partnerships between the federal government, private-sector technology suppliers, and the broader education and training community will be the means for formulating guidelines that will meet common needs. We feel that DOD is providing the Services with sufficient guidance on training technology standards and architectures to ensure interoperability and facilitate collaboration. The Marine Corps, like other Services, has established a distance learning office to coordinate internal distance learning programs with other DOD and government agency technology initiatives. The Marine Corps is a full participant in DOD's ADL initiative and is helping to define DOD training technology standards and distance learning requirements.
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The Marine Corps has developed a training modernization initiative. The objective of this initiative is to establish an integrated career long training and education continuum that spans initial skill training, skill progression training, unit training, and Professional Military Education (PME). The continuum will be supported by both resident instruction and distance learning so that learning will occur when and where it is needed most. Distance learning is a significant part of the overall modernization effort and a major contributor to reducing institutional training time. The goals of the modernization effort are to:
Reduce the time Marines spend waiting for training.
Reduce the length of resident skill training.
Reduce Military Occupational skills mismatches in the Marine Corps Reserve.
Increase Operational Force staffing.
Increase instructional effectiveness of both skills training and PME.
The projected training time reductions resulting from implementation of the modernization initiatives build to a total of 2000 man-years per year by FY05. The Commandant of the Marine Corps plans to reinvest half of the estimated manpower savings into the investment accounts and return the remaining portion to the operating forces to enhance operational readiness. Additionally, the projected O&M savings associated with the reduction in TAD has been taken out of across the Future Years Defense Program and applied to the investment accounts.
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Mr. BATEMAN. Has the Department estimated the savings that it anticipates in expanding this concept of training?
General HARTZOG. Each Service has been required to provide their cost-benefit analysis as part of the planning process. The Army benefits have been computed in accordance with procedures outlined in the Cost Analysis Manual of U.S. Army Cost and Economic Analysis Center. The analysis specifically addresses all cost elements required by Office of Secretary of Defense (Program Analysis and Evaluation). The Army expects immediate savings from each DL course fielded with the primary savings being derived from reductions in the time students spend at resident schools and the associated travel and per diem. The investment strategy being employed is to reinvest those savings in the expansion of the program such that the program pays for itself within 7–8 years while continuing to enable the Army to meet readiness requirements and greatly reduce the time soldiers must spend away from units. Savings accrued after the break even period can then be assigned to other Army priorities.
General NEWTON. DOD has estimated the potential savings that DL can produce. Within AETC, it is difficult to estimate command savings as a result of converting to DL until the AETC course conversion review is completed. We need this product to use as a decision tool identifying just how many courses to convert and the number of students involved. Whatever the outcome of the contracted review, it is important to note that there are significant up-front costs associated with DL and ''offsets'' may not be seen for several years. In fact, the Army DL Plan forecasts a period of eight years before paybacks exceed investments. In the civilian sector, the ''for profit'' Western Governors University, sponsored by the governors of 16 states and Guam, also expect to spend millions of dollars in up-front costs before they begin to operate in the black in 2005.
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The Navy, as part of its effort to reengineer training, estimates the savings from distributive learning will be $4.9M for FY98 and 99.
Mr. BATEMAN. In December 1997, GAO reported that OSD has opportunities to guide the services' distance learning efforts and could encourage greater sharing of successful approaches, wider consideration of opportunities to share facilities and consolidate infrastructure, and more consistence in determining funding requirements. GAO asked the Secretary of Defense or his designee to respond to a series of questions concerning the direction of DOD's distance learning efforts within 30 days. Has the Department responded to these questions?
General HARTZOG. Yes, the report was submitted March 11, 1998 by the Office of the Under Secretary of Defense (Personnel and Readiness). This is the same office that developed and is responsible for the Advanced Distributed Learning (ADL) Initiative.
General NEWTON. On 11 Mar. 98, the Deputy Under Secretary of Defense (Readiness), Mr. Louis Finch, responded to the GAO questions. See the attached documents. The Air Force did provide comments to OSD for inclusion in the response. Issues addressed included:
a. Use of the Army Plan as ''guide'' vice ''model.''
b. Service unique course management and certification requirements.
c. Inclusion of ''education.''
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Admiral TRACEY. The Navy has responded to DOD and DOD has responded to GAO.
General RHODES. The Marine Corps has not been asked to respond to any questions concerning the direction of DOD's distance learning (DL) efforts. However, the Marine Corps has been working closely with DOD and the other Services to develop a viable DL capability across the Department. We have established a dedicated DL office within the Training and Education Division to coordinate our efforts with the other Services. We have also developed a Marine Corps DL Program. This program is in its infancy with several pilot initiatives underway during the FY98–99 time frame. Lessons learned during the pilot phase, from on-going DOD initiatives and interservice cooperation, will be used to guide future Marine Corps investments in training technology and DL. The Marine Corps' DL architecture is being designed to ensure compatibility with other Service systems and to comply with DOD technical and architectural standards. We are also participating in DOD's Advanced Distributed Learning (ADL) initiative in order to benefit from industry/government cooperation and emerging technologies. DOD is leading the way in establishing standards for learning object reuse and courseware exchange. DOD initiatives like ADL are helping the Services develop cost effective solutions to complex DL problems.
TRAINING INFRASTRUCTURE
Mr. BATEMAN. DOD defines its training infrastructure to include billeting, mess facilities, classrooms, equipment, software packages, and instructors used to provide, facilitate, or support training of the military forces. The cost of providing formal military training and education to individuals increased significantly between fiscal years 1987 and 1995. During this period, the training cost per student increased from $53,194 to $72,546. After considering the effects of inflation, the cost per student increased about $4,200. This cost differential, when multiplied by the fiscal year 1995 training workload, shows that since fiscal year 1987, training costs have increased about $745 million more than normal inflation, even though the training workload has decreased.
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In March 1996, GAO reported that DOD lacked an overall plan to guide and measure the progress of reducing training infrastructure in general. What has DOD done to reduce the training infrastructure since issuance of the GAO report?
General HARTZOG. Every opportunity has been and will continue to be taken to save resources through the elimination of infrastructure, and will continue to do so, in the future. We are pursuing efficiencies in the areas cited in the GAO report. ITRO actions completed or working include training on: Stinger/Avenger, DSCS III Satellite, Vehicle Operators, Food Service, Welding, COMSEC, Defense Messaging System, and Heating, Ventilating and Air conditioning. BRAC action is underway to close Fort McClellan and consolidate training at Fort Leonard Wood. We have reduced training locations for Basic Non-Commissioned Officers Course, Drill Sergeants School, and NCO Academies.
On our training installations, the demolition of buildings forces organizations to relocate into better, permanent buildings and become more efficient in their use of space. Thereby, we not only eliminate, but improve the training infrastructure. For example, demolition of Logan Heights at Bliss will save significantly on logistics costs such as transportation and mess hall. In total, from Fiscal Year 1991–1996 we tore down 11.4 Million Square Feet; in 97 we tore down 4.3 MSF and in FY98 we are planning to tear down another 5.2 MSF. That is 20.9 MSF we will no longer have to maintain.
General NEWTON. For AETC, the real issue is the shift in training that has taken place since the Air Force's 1992 Year of Training. The Year of Training initiatives brought training that was buried in the operational commands into AETC. This relieved the operational commands of the training mission and allowed them to better focus on their operational mission. In this consolidation of training mission, we also consolidated the training mission bill giving the true amount of the Air Force's training budget better visibility.
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In the Year of Training initiatives we eliminated direct duty assignments for both officer and enlisted AFSCs; all our non-prior service personnel receive initial skill training at our Technical Training bases. We instituted in-residence 7-level training to provide our mid-level enlisted supervisors critical technical and management skills. Additionally, mergers in officer and enlisted intelligence AFSCs changed the way we trained. There are other impacts beyond the Year of Training initiatives. When the Army closed the Air Base Ground Defense School at Ft. Dix, we brought the training back into the Air Force and AETC at Lackland AFB. When the IAAFA school fell victim to Hurricane Andrew at Homestead, the AF moved the course under the Lackland training wing. The SC/IM merger resulted in increases in the length of time to train. Lastly, the AF has increased student loads by over 1,000 for Guard and Reserve training. As you can see, there have been significant changes in training that reflect the growing trend in the Air Force to centralize training in AETC.
Admiral TRACEY. When defined as the total resource base and process required to design, develop, deliver, and support training programs to meet fleet requirements, the training infrastructure in the Navy is continuously undergoing review and changes to improve efficiency and reduce costs. Training requirements are reviewed at regular intervals to ensure that we are training the right content for the right people at the right place and time in their careers. Navy has extensively reviewed our entire inventory of courses to identify opportunities to either eliminate or compress courses using interactive multimedia and distributed learning technologies. We recently completed a comprehensive training assessment and developed a strategy to reengineer training. Information systems have been consolidated, and further consolidations are planned for corporate manpower, personnel, and training information systems. We have established local training authorities in fleet concentration areas to help the fleet obtain needed training in the local area at the lowest possible cost.
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The following actions have been taken by the Navy to reduce training infrastructure:
BRAC ACTIONS
Closed SSC Orlando—11/96.
Closed SSC San Diego—12/96.
Closed FTC Det Treasure Island (formerly NTTC)—12/96.
CLosed NTC San Diego—4/97.
Realigned NSA Memphis (Relocated NATTC/NAMTRAGRU)—FY97 (no longer a training base).
Close NTC Orlando—FY99.
NON-BRAC ACTIONS
Disestablished COMTRALANT and COMTRAPAC with associated manpower savings—6/98.
Disestablished NAMTRAGRUDET Rota Spain—10/96.
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Downsized SUBTRAFAC San Diego to detachment—10/96.
DEMOLOTION: successfully pursued demo funding through the centrally funded program which will reduce the physical plant footprint by $200 million in current plant value. This began in FY96 with additional demo projects planned for FY99-00. Buildings have been demolished in Great Lakes, IL; Pensacola, FL; Newport, RI; Memphis, TN; and Kingsville, TX.
REGIONALIZATION
Regionalization will reduce installation management billets by consolidating base management into one provider vice several. Savings will be realized through reduction in management/ oversight billets.
Currently ongoing in Pensacola area; planned for South Texas.
SIMULATION
Mr. BATEMAN. Since 1988, DOD has been grappling with how to provide simulations that realistically portray joint warfare operations for training. The military services, the Joint Staff, and the Office of the Secretary of Defense's Director, Defense Research and Engineering undertook development of a new comprehensive system—the Joint Simulation System—to help meet this training need. In November 1995, GAO reported that the new system was scheduled to reach initial operational capability by 1999 and full operational capability by 2003 at a cost of $416 million. However, the initiative had not progressed beyond the conceptual stage since a memorandum of agreement was signed in June 1994. The services and the Joint Staff had disagreed about the definition of the new training system and a plan of action. The Joint Simulation System is one of several large scale computer training systems that have been called into question by the DOD Inspector General regarding costs, benefits, and effectiveness.
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What progress has been made to define the Joint Simulation System and develop a definitive plan of action?
General HARTZOG. Development of the Joint Simulation System (JSIMS) is progressing satisfactorily. The JSIMS Enterprise Partners have agreed on the new Acquisition Program Baseline (all services and agencies have singed a Memorandum of Agreement), with Initial Operating Capability (IOC) due April 2001. The Master Schedule has been staffed and prepared for presentation to management; no significant changes are anticipated. System-level Requirements Analysis continues, with Requirements Walkthrough scheduled for 11 May 1998. Modeling Resolution and Synthetic Natural Environmental discussion are progressing well. Functional Use Cases and system object models have been developed for selected JSIMS components and applications. Integrated Product Teams and Working Groups are in place and functioning as envisioned. Programs remain highly interdependent. Aggressive management will be required for both programs to ensure timeliness are met. The National Simulation Center at Fort Leavenworth, Kansas, will conduct reviews every 90-days beginning 1 June 98 and will report the progress in meeting requirements and deliverables of the WARSIM program to senior leadership.
General NEWTON. The definition of JSIMS encompasses all of the following:
JSIMS Description: The Joint Simulation System (JSIMS) is training simulation system with projected applications to other areas including mission rehearsal, mission planning, doctrine development and analysis. The Joint Program Office (JPO) contribution to the system is the JSIMS Core which includes the Core Infrastructure and Life Cycle Applications. Contributions from Services/Agencies constitute the varying battlespace representations (or Mission Space Objects—models) associated with representations of military units and warfighting platforms.
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JSIMS Management: The JSIMS development and management framework is a collaborative development effort among the Service/Agencies based on a JSIMS Memorandum of Agreement, initially signed in June 1994 and updated December 1996. The MOA establishes the JSIMS JPO as the development agent for the JSIMS Core Infrastructure and simulation applications (After Action Review; Scenario Generation; etc.) and the Services/Agencies with development of the battlespace representations aligned with the varying mission domains (land, air & space, maritime, intelligence, etc.). The JSIMS JPO is also assigned the mission of leading the management effort, establishing the development and technical standards as well as integrating the software contributions into a single system environment to be used by all participants. The effort is managed through a Integrated Product Team construct under an Enterprise approach in which all participants are very actively involved.
JSIMS Acquisition Status: The JSIMS program has an established acquisition oversight framework, developed under the precepts of DOD 5000 series guidance. The framework, specified in the JSIMS MOA, identified the JSIMS Senior Review Board (SRB) as ''the executive level body charged with functional oversight of the JSIMS program. As such, it is the final authority for resolving JSIMS issues. The SRB is chaired by the Director, Defense Research and Engineering (DDR&E).'' The SRB was not required to meet during 1997. Under the SRB is the DOD Executive Council for Modeling and Simulation Training Council, co-chaired by the J–7 and the DUSD(R). The Training Council met at about 6-week intervals throughout 1997, primarily dealing with JSIMS-related issues. The Air Force Program Executive Officer for Battle Management (AFPEO/BA) was given responsibility for acquisition oversight of the JSIMS effort. He is involved with the program on a daily basis in managing the execution of the program. Formal oversight is conducted through a variety of mechanisms, including quarterly program reviews and periodic status reporting. The JSIMS program was most recently reviewed by the current Milestone Decision Authority in March 1996 in an In-Process Review. Preparations are underway for a Milestone I/II Review.
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In response to the DOD Inspector General Report, the OSD Review Team (ORT), co-chaired by DDR&E, USD(R), and ASD(C3I), was established. This group met four times between Oct 97 and Mar 98 to review the JSIMS program. These reviews resulted in a stronger collaborative environment and tighter coupling of development objectives, evidenced by the concurrence of a single JSIMS Acquisition Program Baseline (APB) approved all the participating Services/Agencies. The APB contains key performance and schedule parameters that are the basis for satisfying JSIMS requirements contained in the JSIMS ORD.
JSIMS Progress/Plan of Action: The JSIMS Integration and Development contract was awarded to TRW/SAIC in December, 1996. As of Fall, 1997, there were five prime contracts awarded to cover the warfighting domains from the participating Services/Agencies. JSIMS is currently on a course of action with defined roles/responsibilities for development among all the Services/Agencies, established and approved requirements by Service/Agency participants, and approved funding in place or both the JSIMS Core and Service/Agency efforts. Under the JSIMS Enterprise IPT construct, the JSIMS Enterprise has made significant development progress to date:
Mar 97—Single JSIMS SSS (System/Subsystem Specification) approved by the Enterprise.
May 97—JSIMS architecture approved by DDR&E.
Nov 97—JSIMS ORD V2.9 approved by Joint Requirements Oversight Council.
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Jan 98—Integrated Master Schedule with all program schedules synchronized completed.
Mar 98—Build 0 (the first of four builds for IOC) completed on schedule.
At IOC, JSIMS will support training of CINC Joint Mission Essential Tasks and Service Task List items consistent with the CJCSI 3500.02A Joint Training Master Plan and functionality J–3 in the JSIMS Universal Capabilities List. JSIMS will interface with trainer/user C4I systems, including GCCS, JMCIS, CTAPS/TBMCS, and ATCCS. JSIMS at IOC will support a geographically distributed simulation environment and will support links to simulators.
Admiral TRACEY. The Joint Requirements Oversight Council (JROC) formally approved the Operational Requirements Document, with associated Key Performance Parameters, in December 1997. Also, an Acquisition Program Baseline (APB), or plan of action, was approved at an OSD review on 26 March 1998. The OSD review team also approved the baseline schedule that identified an Initial Operational Committee date of April 2001. The APB defines the capabilities to be delivered within the cost, time and performance limitations placed on the program. The APB will be reviewed by the JROC for approval on 27 March 1998.
JSIMS development is organized into several software builds, in an iterative process, which are building blocks in achieving IOC. The first build, Build 0, was completed in February 98. It was a process build intended to test the development process across the Enterprise domains and provide lessons learned before commencement of actual software coding. Build 0 and other efforts to date uncovered requirements for which proper understanding and funding were not provided. The new schedule outlined in the APB allows the Enterprise partners to execute the additional requirements and provide the originally agreed upon functionality.
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General RHODES. The Marine Corps has closely examined its training policies, implementation plans and management strategies as a result of the 1996 GAO report and identified two critical factors that impact operational readiness and training infrastructure. First, we have a much younger force today than we had ten years ago. While our end-strength has decreased, our enlisted accessions have, in fact, remained relatively constant resulting in a force composed of nearly 70% first-term Marines. Second, the fielding of new equipment and the requirement to train for new missions in a more complex operational environment have tended to increase training pipelines. Hence, our training workload has actually increased in real terms at a time when our end-strength has decreased. These factors create a situation in which training requirements frequently out-strip our existing training capacity at Marine Corps formal schools. Insufficient capacity results in longer training tracks, larger awaiting training pools, and lower manning levels in the operating forces, thus impacting operational readiness.
To mitigate some of these problems and reduce training infrastructure, the Marine Corps has instituted a comprehensive Training Modernization Initiative (TMI). The training modernization concept involves completely re-examining our current training management processes and instructional methods. Several approaches are being used including, determining required capabilities by military occupational specialty (MOS), developing training progression models for each MOS, focusing on essential training for MOS qualification, technology infusion at the formal schools, applying distance learning strategies, improving internal training management processes and linking other Service training modernization efforts. Training reviews began in FY96 and will continue through FY02 until every MOS has been reviewed under the TMI.
Several curricula have already been redesigned or are near completion including Marine Combat Training, Infantry entry-level training, Armor training and Communications/Data Systems training tracks. The new programs of instruction are resulting in shorter, more focused courses that will enable us to increase frequency and throughput without reducing training effectiveness. Moreover, the training reviews are identifying opportunities for interservice collaboration, technology infusion and distance learning that will permit us to extend learning opportunities beyond the boundaries of the traditional classroom thus further increasing our training capacity.
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Finally, the Marine Corps has developed a total force Distance Learning (DL) Program. The DL program is designed to integrate into the Department of Defense Education and Training Information Infrastructure (ETII) which is a subset of the Defense Information Infrastructure (DII). The Marine Corps program will be fully interoperable with other Service DL programs such as the Total Army Distance Learning Program (TADLP), the Navy Training Technology Program and Air Force DL initiatives. We are heavily leveraging on the other Service technology efforts because over 63% of our MOSs are trained at other service schools. As the other Services transition to technology-based training, the Marine Corps must ensure that it has compatible systems in order to benefit from the training.
Mr. BATEMAN. What is the department's policy and procedures for evaluating the training and effectiveness and cost-effectiveness of large-scale training simulations?
General HARTZOG. Training simulations are evaluated as required by the acquisition process. Under Army Regulation (AR) 350–38, current Department of the Army policy requires that every large-scale training simulation be evaluated through a Cost and Training Effectiveness and Analysis (CTEA) to determine its effectiveness in supporting training versus the costs of the system. The CTEA is conducted prior to Milestone I to provide rough order of magnitude costs and to verify the need for the training requirement. The CTEA is updated between milestones through a more comprehensive analysis conducted to further refine and verify functional requirements, validate the training strategy, and identify trade-offs with other training resources.
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The Cost and Training Effectiveness Analysis for Warfighters' Simulation (WARSIM) 2000 was published in April 1994 to support the WARSIM Milestone I/II In Process Review (IPR). The study provided an overall assessment of the costs and training benefits of using computer-based simulation to support the training of unit headquarters and command posts in Command Post Exercise events. In addition to WARSIM, Janus (Army), Brigade/Battalion Battle Simulation (BBS), Corps Battle Simulation (CBS), Combat Support Training Simulation System (CSSTSS), and Marine Air Ground Task Force Tactical Warfare System (MTWS) were evaluated.
Prior to fielding, training simulations undergo technical and operational testing in accordance with AR 73–1. Technical and operational tests are conducted using independent evaluators from the Operational Test and Evaluation Command who use performance parameters and other exit criteria to provide the decision authority with the necessary data to determine that minimum requirements have been satisfactorily achieved.
General NEWTON. To date, AETC has not conducted many large scale training simulations. Our mission is to train initial skills that require individual training exercises vs. large group exercises.
The largest distributed wargame we participate in each year is Prairie Warrior, the Army Command and General Staff College graduation exercise. Our evaluation criteria for this exercise are predominately centered on educating our Army counterparts on the value of air power. We have consistently worked to reduce the cost of playing—it's now around $430k per year. Since the results won't be known until the next generation of Army leaders take command, it's difficult to determine cost-effectiveness, but we believe we are making an impact in creating a truly joint force.
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On the flight training side, our networked simulations are usually limited to same-site hook ups where simulators at one side are networked together for a limited duration, limited scope training event.
Admiral TRACEY. A concerted effort has been made to ensure that procedures for evaluating training effectiveness are designed into the development of new training simulations such as Joint Simulation System and Battle Force Tactical Trainer. These procedures, called Learning Methodologies, involve using automated Measures of Effectiveness (MOEs) and Measures of Performance (MOPs) as the basis for evaluating training effectiveness. Current legacy systems, such as the Enhanced Naval Wargaming System (ENWGS) which are being replaced, do not have a means for evaluating training effectiveness.
Due to limited resources and the expense of large scale training systems, every new system must undergo a rigorous evaluation of its potential training effectiveness and cost effectiveness. No support is provided for new systems which do not allow for improved for more efficient training.
Mr. BATEMAN. Since 1988, DOD has been grappling with how to provide simulations that realistically portray joint warfare operations for training. The military services, the Joint Staff, and the Office of Secretary of Defense's Director, Defense Research and Engineering undertook development of a new comprehensive system—the Joint Simulation System—to help meet this training need. In November 1995, GAO reported that the new system was scheduled to reach initial operational capability by 1999 and full operational capability by 2003 at a cost of $416 million. However, the initiative had not progressed beyond the conceptual stage since a memorandum of agreement was signed in June 1994. The services and the Joint Staff had disagreed about the definition of the new training system and a plan of action. The Joint Simulation System is one of several large scale computer training systems that have been called into question by the DOD Inspector General regarding costs, benefits, and effectiveness.
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What progress has been made to define the Joint Simulation System and develop a definitive plan of action?
What is the department's policy and procedures for evaluating the training effectiveness and cost-effectiveness of large-scale training simulations?
Have studies been performed to assess the benefits and cost savings of simulated training over traditional forms of training?
General RHODES. An updated JSIMS Memorandum of Agreement has been signed on 20 Dec 96. The Commanding General, Marine Corps Combat Development Command signed for the Marine Corps. A Joint Operational Requirements Document (ORD) and Concept of Operations have been published. The ORD version 2.9 was approved by the Joint Requirements Oversight Council (JROC) in November of 1997. Further definition of user requirements has been obtained in Joint User Capabilities List, a collection of 33 ''use cases'' that define lower level requirements in greater detail. The Office of the Secretary of Defense (OSD) Review Team was successful in requiring an Acquisition Program Baseline (APB). The APB committed the Services, Joint Staff, Joint Warfighting Center, Defense Intelligence Agency, and the JSIMS Program Office to providing the functionality and funding outlined in the APB. The Commander, Marine Corps Systems Command and Deputy Chief of Staff for Plans, Policy & Operations (Headquarters, Marine Corps) signed as the Marine Corps material provider and proponent, respectively. The Marine Corps has developed an internal JSIMS ORD as an appendix to the Joint ORD. Our ORD was signed by the Assistant Commandant of the Marine Corps in September of 1997.
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I cannot speak for the Department of Defense (DOD) regarding the department's policy and procedures for evaluating the training effectiveness and cost effectiveness of large scale training simulations, but from the perspective of the Marine Corps Combat Development Command, the evaluation policy is to have the JROC review every four months or so—as well as conducting lower level reviews. Evaluating the cost effectiveness of large scale training simulations is difficult because the only other options are: 1) Large scale field exercises which would undoubtedly be more expensive and increasingly difficult to conduct given environmental constraints and the wear & tear on warfighting assets, or 2) Map exercises which lack realism and can't adequately exercise the Command, Control, Communications, Computer and Intelligence (C4I) systems that are currently being fielded. MCCDC is not aware of any firm DOD policy or procedure that tell one how to evaluate a large scale simulation in terms of training and cost effectiveness.
Many joint-level studies in this area, all purport to show training and cost effectiveness for simulations. There was a study called ''Simulations for Training'' that was conducted by PRC, a consulting firm, over the summer of 1997 that found similar costs and training effectiveness.
Admiral TRACEY. Exercise Kernel Blitz 95 was the first attempt to formally insert Modeling and Simulation into a fleet exercise. In conjunction with this demonstration, the Center for Naval Analysis was tasked to study the benefits and cost savings associated with the use of simulated training in fleet exercises. Their assessement was that simulated training could provide value added and cost avoidance provided those training objectives were well defined.
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There are efforts underway by the fleet to determine the potential impact on the inserting of emerging simulation systems into the Interdeployment Training Cycle (IDTC). This includes both a reduction in the training cost as well as a decreased time at sea to meet training objectives.
With regard to Battle Force Tactical Trainer (BFTT), savings have already been taken in the current POM in the reduction of team training costs ashore in anticipation of the fielding and deploying of this system.
Other related studies include:
Center for Naval Analysis Paper CAB 95–13/March 1995, ''Applying Distributed Interactive Simulation Technology to Operational Training: A Perspective from Navy STOW-E''
Institute for Defense Analysis (IDA) Paper P–3222, ''Time and Command Operations: The Strategic Role of the Unified Commands and the Implications for Training and Simulations'', October 1996.
Center of Naval Analysis Paper CRM 95–143, ''The Contribution of Aircraft Simulators to the Training and Readiness of Operational Navy Aircraft Squadrons'', September 1995.
Center for Naval Analysis Paper CRM 96–101, ''Modeling and Simulation for Navy Training: Charting a Course for Future Investment'', November 1996.
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Mr. BATEMAN. Have studies been performed to assess the benefits and cost savings of simulated training over traditional forms of training.
General HARTZOG. The Army Aviation Center conducted a study in FY94 to assess the costs benefits of using its aircraft simulators for aviation officers and warrant officers versus training using the real aircraft. Although the study determined that the simulators provided a 60% solution in terms of the number of tasks that could be trained on them versus real aircraft, the cost avoidance was over $8.9M.
No other specific studies have been conducted to assess the benefits and cost savings of large scale constructive simulations over traditional forms of training. This is due to a number of reasons. First, for the large scale simulations such as WARSIM 2000, the training audience is typically a division or corps staff. Most units change personnel too frequently to allow a viable assessment of the effects of training on the same training audience in a simulated or traditional training environment. Second, it is difficult to compare the effects of a simulated training environment with traditional forms using completely different training audiences. The variability in conditions as well as personnel would make such an assessment statistically difficult to support. Third, the amount of time and resources required to establish this type of assessment would be excessive.
However, we do know that there are numerous Mission Essential Tasks that are not trainable in a traditional form of training, for various reasons. The primary reasons are safety, environmental constraints, limitations on maneuver terrain, and excessive costs. Only a simulated environment provides the training conditions for these types of tasks to be conducted. As an example, armor and mechanized infantry must be able to conduct combined arms operations with artillery firing danger close. In a live training environment, the safety of the crew members would make this operation unsafe. In simulators, such as the Close Combat Tactical Trainer, crew members can realistically training with the artillery firing danger close without any concerns for safety.
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General NEWTON. Yes, there have been numerous studies in this area. In 1995 the Defense Modeling and Simulation Office (DMSO) formed a Modeling and Simulation Benefits Task force (MSBTF) to consolidate documented reports of quantifiable benefits of modeling and simulation. Their findings were that training applications of M&S were found to be common and positive. Individual skills training, including both cognitive and psychomotor skills, were well reported. Cognitive skills trainers, typically computer-aided instruction, paid for themselves in five years or less. Psychomotor skills trainers, e.g., flight simulators, driver trainers, and maintenance trainers, were all shown to be cost effective when properly mixed with training on the real equipment.
Some data from the studies showed:
A review of several studies showed that the operating costs of flight simulator are about 10% of actual equipment per hour trained or 33%, if acquisition cost is taken into account. The majority of tasks trained on simulator (59%) have significant positive transfer to flight performance.
Bombing and airdrop accuracy data indicate that additional simulator hours seem to have a greater positive effect than additional flying hours, and simulators hours cost at most a third as much. Helicopter accident data indicate that both flying hours and simulators hours reduce accidents, but simulator hours do not increase exposure to risk.
A review of maintenance simulators found that they are as effective for training as actual equipment trainers when measured by student achievement in school. In the majority of cases examined, the cost to develop and fabricate one unit was less than 60% of actual equipment and the cost of fabricating a second unit was less than 20%. Acquisition and use of a maintenance simulator over a 15-year period costs 38% as much as actual equipment. In studies where time to train was reported, simulators took 25–50% less time than actual equipment.
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QUESTIONS SUBMITTED BY MR. ORTIZ
Mr. ORTIZ. You stated during the hearing that privatized A-School instruction has not been as good as having sailors at the podium, so the Navy is reversing itself and putting sailors back in the classroom as instructors. Could you please explain what were the problems you found with privatized instruction, and how long did it take for those problems to materialize?
Admiral TRACEY. The Sailorization process begins at Recruit Training Command and continues through apprentice training and/or A-Schools, C-Schools, and on into the fleet. The critical point is in the A-Schools, after boot camp, when newly graduated recruits require the most leadership, mentoring, and reinforcement of the lessons they learned in basic training. Over the past several years, we have begun outsourcing instruction as a cost-cutting measure. Recently the Navy has consolidated much of our initial skills training as a result of BRAC relocation's. Several schools have found themselves with increased student populations, while the size of their military staff did not grow in proportion. The combination of the two events, outsourcing and then consolidation, increased the proportion of non-military instructor and support staff, gradually decreasing the number of available military personnel for reinforcement of the lessons learned in boot camp. Civilian contract instructors do an excellent job of providing our young Sailors with the required technical instruction. However, they cannot serve as mentors and role models as our military instructors do. To correct this trend, we have increased the military staff at such schools to ensure that every initial skill student receives appropriate mentoring and military instruction either in the classroom or outside it. We have also stopped further outsourcing of initial skills instructor billets, limiting further outsourcing targets to support staff with little student interface.
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Mr. ORTIZ. Naval Air Station Pensacola was funded for real property maintenance this year at 2 1/2 times the level Naval Air Station Corpus Christi got, which leads me to think some in the Navy hierarchy may have an agenda about which bases are worth preserving and protecting. Out of $140 million for five Naval aviation bases, Corpus Christi got only 19 percent, while Pensacola got 46 percent. Does the Navy have an agenda regarding which bases it will preserve and protect?
Admiral TRACEY. CNET allocates funding for facilities based on requirements and the availability of funding. For comparison purposes, NAS Corpus Christi has a Current Plant Value (CPV) of $593 million, and NAS Pensacola has a CPV of $1,360 million. CNET's overall funding strategy in FY98 has been to fund those training requirements necessary to produce qualified trainees first, and we have had to defer maintenance throughout Naval Education and Training Command in order to achieve that goal. The figures quoted in the question above refer to Real Property Maintenance (MRP) plus Base Operations Support (BOS), which aggregated $143 million for all of the training Naval Air Stations. NAS Corpus Christi received MRP funding of $6.0 million and MRP/BOS total of $26 million. In addition, NAS Corpus Christi's budget is augmented by over $5 million by reimbursement from non-Navy tenant commands such as the Corpus Christi Army Depot. These reimbursements increased available FY98 funding to over $30 million. These figures compare with NAS Pensacola's FY98 allocations in the same categories of $10.7 million and $67 million respectively. Comparing the air stations' funding levels, NAS Corpus Christi received 56% of Pensacola's maintenance allocation and 47% of Pensacola's maintenance plus operations total (including non-Navy reimbursements), to support a plant value 44% the size of Pensacola's.
Unfortunately, our limited funding for FY98 has made it necessary to defer maintenance throughout all our training Naval Air Stations as well as other training bases, to ensure we produce the qualified officers and enlisted trainees the Navy needs.
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Mr. ORTIZ. I am deeply concerned about the backlog in funding for real property maintenance. Naval Air Station Corpus Christi has $12 million in critical backlog and $69 million in deferred maintenance. Naval Air Station Kingsville has a $17 million critical backlog. The situation has gotten to the point at Kingsville that when leaks spring in the walls and ceiling of one of the base dental clinics, they were told to just turn off the lights and lock the door because there wasn't any money to fix it.
Now that CNET is the major claimant for the South Texas Navy bases, what are your plans to meet the real property maintenance needs in South Texas? Are we going to continue to let property deteriorate to the point that it becomes unusable or unsafe—and then replacement costs will be just that much higher?
Admiral TRACEY. We aggressively pursue funding to correct critical backlogs at all of our activities. As discussed in an earlier question, FY98 overall funding shortfalls have required a deferral of real property maintenance into FY99 and beyond, excepting only that absolutely necessary to continue operations. NAS Corpus Christi's reported Critical Maintenance and Repair (CMAR) backlog is $11 million. NAS Kingsville's CMAR backlog is $6.5 million. However, NAS Kingsville's $4.0 million maintenance budget for FY98 should give them the ability to repair the Dental Clinic this fiscal year. Allow me to put those figures into perspective. A metric that the Navy uses to compare overall facility conditions is called the Facility Condition Index (FCI), which measures the critical backlog of maintenance and repair divided by the Current Plant Value (CPV) for which a command has maintenance resonsibility—so lower numbers are better. According to this metric, both NAS Corpus Christi at 1.03% and NAS Kingsville at 1.17% are in better condition overall than the average for NAVEDTRACOM, which is 4.26%. As a further comparison, NAS Pensacola currently has an FCI of nearly 2.0%. In South Texas, as throughout NAVEDTRACOM, our plan is to continue to fund repair and maintenance to the maximum extent our budget allows. We project that our overall budget in FY99 and beyond should enable us to reduce those FCI figures.
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KITCHEN POLICE
Mr. ORTIZ. Following up on statement you made during the hearing, what prevents you from mixing soldiers and civilian contractors for functions such as KP? Why did you cancel the civilian KP contract—was it too expensive, unresponsive, inflexible?
General. ERNST. There is nothing that prohibits using contractor personnel and military personnel in the same mess hall. However, legal interpretation indicates that contractor personnel may not supervise military personnel. Consequently, drill sergeants were placed in mess halls to direct the work of the military kitchen police. The total time kitchen police duties are performed during the 13 weeks of Infantry One-Station-Unit-Training is approximately five days. Training time ''lost'' is made up by trainees during non-scheduled training periods with drill sergeants as the instructors.
The civilian contract services were withdrawn due to budget constraints.
Mr. ORTIZ. Has CNATRA experienced the same problem mentioned in her testimony.
Admiral BUCCHI. All of our flight instructors are military aviators and provide one of the most visible and effective leadership and values training platforms we have. I feel it is vital to maintain Fleet Aviators teaching Student Naval Aviators specific aviation warfighting skills, as well as mentoring them professionally. We cannot afford to let someone other than a professional active duty Naval officer provide the primary role model for our junior officers. That said, CNATRA does utilize contract instructors to instruct in all of our flight simulators (T–34, T–44, TH–57, T–2, T–45). These instructors have extensive background in military aviation, and have been an outstanding addition to our training staff. We also use contract pilots in the Naval Flight Officer (NFO) T–39 portions of the intermediate and advanced syllabi to pilot the aircraft only, not instruct. The instructors are winged NFOs who provide the actual instruction to the students.
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We have some contract instructors in the ground phase of instruction, the majority of whom are former military aviators. They teach the mechanisms of specific aircraft performance and do an outstanding job.
Military instructors/staff have oversight on and routinely review the respective syllabi the simulator and systems instructors teach.
Mr. ORTIZ. You said in your written statement ''the service received from a contract provider is only as good as the performance criteria written into the contract.'' In other words, the maintenance received is only as good as the contract writer. What aircraft maintenance needs (in terms of material, function, flexibility, and response) have you experienced that weren't provided for in the contract, how quickly were you able to get those needs met, and what was required to change the contract?
Admiral BUCCHI. The Performance Work Statements (PWS) for the various maintenance contracts are written by the applicable Naval Air Systems Command (NAVAIR), Program Manager Air (PMA) office. Within each PMA an Integrated Product Team (IPT) takes input from the CNATRA personnel to determine requirements for each contract prior to PWS preparation. When proposals are received, a technical evaluation team composed of IPT, CNATRA and Training Wing Reviews each proposal in order to recommend a source selection.
There have been some instances where requirements were not in the original contracts. The contracts can be and have been modified to correct discrepancies. Many minor changes have been completed by the Administrative Contracting Officers (ACO); their response has been prompt.
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The system in place for securing the services of a maintenance contractor is adequate and flexible enough to respond to changing requirements and meets our needs.
Mr. ORTIZ. Would accelerating the conversion to the glass cockpit T–45 ''Goshawk'' at Naval Air Station Kingsville alleviate the possibility of future problems with meeting training requirements such as those that occurred when the T–2 ''Buckeye'' was grounded?
Admiral BUCCHI. Early conversion of the T–45A inventory at NAS Kingsville to T–45C glass cockpits would not significantly enhance Strike Pilot Training Rate production capacity. NAS Kingsville T–45s will begin retrofit in 2002 at the rate of 9 to 12 airframes per year. Additionally, the simulators to support the changeover will also be retrofitted at the rate of approximately one Operational Flight Trainer (OFT) per year until 2006 when the Instrument Flight Trainers (IFT) begin their retrofit. The down time and phasing for these units is critical to meeting required Pilot Training Rates. Any perturbation to the current plan could adversely affect our strike Pilot Training Rate output.
Mr. ORTIZ. In your written statement you said ''If budget constraints forced us to choose between sending five partially qualified aviators to the fleet or one fully qualified aviator, the fleet would get one fully qualified warrior.'' Are we at that point yet? Are we close?
Admiral BUCCHI. Are we at that point yet? No. Are we close? No. The ability to meet required pilot and naval flight officer (NFO) production rates depends on the availability of balanced resources across the Training Command. These resources include O&MN flight dollars, sufficient numbers of aircraft, programmed aircraft maintenance availability and instructor manning.
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Primarily due to imbalances caused by the 1997 suspension of T–2 flight operations, CNATRA fell 51 pilots short of FY97 production goals for the Strike pipeline while meeting their goals in the Maritime and Rotary pipelines. We project a shortfall of 83 Strike pilots for FY98, largely due to insufficient preload from the T–2s in FY97 and the first quarter FY98.
Navy is committed to 100% manning of pilot and NFO instructors. Current manning is well within adequate range for pilot training requirement. Additionally projected OM&N funding is sufficient to achieve our PTR in FY 99 and outyears.
Mr. ORTIZ. In your written statement you said ''I am also pleased to tell you that the training capacity resident in our five training Naval Air Stations is sufficient to accommodate all our training requirements programmed for the out years.'' I was happy to read that statement because it would appear to affirm the need for NAS Corpus Christi as well as NAS Kingsville for some time. What would have to happen to change that assessment?
Admiral BUCCHI. Presently NAS Corpus Christi is projected to be operating at 75 percent capacity and NAS Kingsville 81 percent for FY–01 and beyond. This level allows the NAVY to strike a balance between utilization and capacity. Some surge capacity allows for programmed increases and provides flexibility in times of crisis or unforeseen circumstances.
Mr. ORTIZ. In light of your statement that ''our training bases tend not to fare as well in these last two areas as do Fleet Concentration Area bases,'' namely availability of medical treatment and suitable military housing, what are your comments on the decision to downsize Naval Hospital Corpus Christi and do away with its inpatient capability? With the presence of Naval Station Ingleside, the Mine Warfare Center of Excellence, South Texas is a Fleet Concentration Area. And, how critical is the military housing situation in South Texas?
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Admiral BUCCHI. In reengineering the Naval Hospital, essential medical services have been maintained for the Corpus Christi military community while permitting reallocation of scarce healthcare resources.
(1) In-patient care is now provided through an External Resource Sharing Agreement with Spohn Hospitals. Feedback concerning this program has been positive from the patients, the military physicians and Spohn. This arrangement has permitted our military physicians to provide a broader scope of care for their patients in state-of-the-art facilities.
(2) The replacement of the Emergency Room with a contract Primary Care Clinic (becoming the standard at many military hospitals) has increased access to care for all categories of beneficiaries while ensuring that patients with emergency conditions beyond the capabilities of this facility are routed more expeditiously to the appropriate level of care in the community.
(3) The implementation of Tricare in the Corpus Christi area has allowed for the discontinuation of van service for our active duty personnel to military treatment facilities located in San Antonio. This change has resulted in reduced time lost and lower TAD costs to local commands by permitting our Sailors to receive specialty medical care in the immediate Corpus Christi area.
The entire South Texas region is on the Navy's list of critical housing areas. The three-year average utilization rate for military family housing is 99.3% and the average waiting time for base housing exceeds 6 months. Approval is currently pending for $41 million dollars designated as MILCON in FY98 to be converted to Private Public Venture (PPV) housing. If approved this will result in a net gain of 1297 new/revitalized family housing units for the south Texas region.
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Department of the Air Force responses to Mr. Gibbons's questions are classified.
QUESTIONS SUBMITTED BY MR. GIBBONS
Dissimilar Air Combat Training
Mr. GIBBONS. ''Many Navy pilots interviewed also reported that fighter squadrons now rarely train against dedicated aggressor squadrons as used to occur at the Navy's advanced combat aviation schools.''
It appears the USAF and USN are repeating the history of the pre-Vietnam fighter pilot's air combat proficiency. In Vietnam, the fighter pilot's chances of survival increased dramatically if they survived the first 10 air combat sorties. Dissimilar Air Combat Training with foreign fighters (i.e., MiG–29 or SU–27) maneuvering performance is considered the most desirable type of training for realism. Understanding your current budget pressures and constrains—if additional funding was available, when and where would the USAF bed-down an aggressor squadron of MiG–29 aircraft?
Admiral TRACEY. The Navy is exploring all available options for fulfilling dissimilar air combat training requirements, including the use of MiG–29's employed in the adversary (training) role, whether they be leased or purchased (including Moldovian MiG's already on hand). Our intention is to maximize the training benefit to the fleet aviator with the funds available. Preliminary findings do not support continued efforts to procure MiG–29 aircraft for use as USN adversaries because of their limited availability and the relatively high operating and maintenance costs.
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Mr. GIBBONS. Has your service studied the start-up costs and annual operating costs of a MiG–29 aggressor squadron?
Admiral TRACEY. Yes. The Navy is exploring all available options for fulfilling these training requirements, including the use of MiG–29's employed in the adversary (training) role, whether they be leased or purchased (including Moldovian MiG's already on hand). Preliminary findings indicate the costs to operate MiG–29 aircraft are excessively high because of their limited availability and high operating maintenance costs.
Mr. GIBBONS. Has your service considered utilizing the Moldovian MiG–29 currently stored at Wright Patterson AFB?
Admiral TRACEY. Yes. The Navy is exploring all available options for fulfilling these training requirements, including the use of MiG–29's employed in the adversary (training) role, whether they be leased or purchased (including Moldovian MiG's already on hand).
Mr. GIBBONS. What would be the cost of upgrading these aircraft to perform aggressor training sorties?
Admiral TRACEY. After initial airworthiness inspection of these aircraft, DOD experts have determined that most of them could not be returned to safe flying status. Very limited upgrades would be required in order to safely operate the flyable aircraft in the adversary mission. However, the cost to fly and maintain these aircraft for use in that role would not be the most prudent use of assets or funds.
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Mr. GIBBONS. Has there been any investigation of the possibility of leasing MiG–29's?
Admiral TRACEY. Yes. The Navy is exploring all available options for fulfilling these training requirements, including the use of MiG–29's employed in the adversary (training) role, whether they be leased or purchased (including Moldovian MiG's already on hand).
Next Hearing Segment(5)
(Footnote 1 return)
The magnitude of savings in the DRI report were based on subjecting 150,000 military and civilian positions to the A–76 process. DOD now plans to subject over 220,000 positions to the process but they have not updated their savings estimate.
(Footnote 2 return)
The magnitude of savings in the DRI report were based on holding A–76 competitions for activities that currently involve 150,000 military and civilian positions. DOD now plans to expand the competitions to activities involving over $220,000 positions. However, they have not yet updated their cost savings estimate.